PRIVATE BUSINESS

London Development Agency Bill
	 — 
	Milford Haven Port Authority Bill [Lords]

Read the Third time, and passed.

COMMITTEE OF SELECTION

Order read for resuming adjourned debate on Question [16 October],
	That Mr. John Hayes be discharged from the Committee of Selection and Mr. Peter Luff be added to the Committee.— [Mr. Jim Murphy.]

Hon. Members: Object.
	Debate to be resumed tomorrow.

Oral Answers to Questions

SCOTLAND

The Secretary of State was asked—

Business Start-ups

Julian Lewis: If she will make a statement on Government support for new business start-ups in Scotland.

Gregory Barker: If she will make a statement on Government support for new business start-ups in Scotland.

Helen Liddell: This Government have provided a stable economy with low inflation, low interest rates and, since 1997, cuts in the average corporation tax bill for small companies by 30 per cent., all of which are essential for new business start-ups; and the new 10p starting rate of tax is of great value to small firms, many of whom in Scotland are unincorporated.

Julian Lewis: The Secretary of State recently travelled all the way to Australia and New Zealand to promote the virtues of the private finance initiative. Does she think that PFI will help to arrest, and even reverse, the decline in small business start-ups in Scotland? Was she any more successful in promoting the virtues of PFI to the New Zealanders and Australians than she has been with her own Scottish Back Benchers?

Helen Liddell: The hon. Gentleman should do his homework before he asks questions. There were 10,769 new business start-ups in the first six months of 2002—22 per cent. up on what they were previously. Great use is, of course, made of public-private partnerships in Scotland. Indeed, the complete refreshment of the secondary sector in Glasgow has meant that there has been a considerable increase in procurement from small businesses, which helps the overall environment for small business start-ups.
	We are well aware of the popularity of the Government's proposals on PPP, which have been widely taken up by my colleagues in the Scottish Executive. Wherever one travels, the first point one must make is that this is not the old Tory model of PFI, which did not work.

Gregory Barker: What is the situation for business start-ups compared with that in 1997? Will the Secretary of State confirm that since 1997 business start-ups have dropped by 30 per cent.? Will she also confirm that 50 per cent. of Scotland's graduates emigrate each year because there are not enough opportunities for them in small business?

Helen Liddell: The hon. Gentleman obviously does not know his Scottish history, because one of its great strengths is that our graduates have moved throughout the world. Indeed, the hon. Member for Vale of York (Miss McIntosh), who is sitting next to the hon. Gentleman, is a Scottish graduate who sought to pursue her career elsewhere, as is the shadow Front-Bench spokesperson, the hon. Member for Beckenham (Mrs. Lait). That all adds to the resource that is available to Scotland internationally.
	I am not going to confirm the hon. Gentleman's figures, but I will say to him that there has been an historic problem with small business start-ups in Scotland. There has been a wealth of research over the past 25 years. Some of the evidence relates to risk aversion in the Scottish population, some to a fear of failure and some to the fall in informal finance. The Government, working with the Scottish Executive, have a target of 100,000 new Scottish start-ups by 2009; we are doing what we can to reverse the trend.
	The key to the future of small business start-ups in Scotland is the overall European climate. During the Lisbon processes, the Government began a change that will assist small business start-ups; that change will continue to create the 20 million new jobs that will be needed throughout Europe. The splits in the Conservative party do not help that one bit.

David Stewart: Does my right hon. Friend share my view that a very important niche market for Scottish business start-ups is the Scottish film industry, from the new Inverness film studio to the very successful XMonarch of the Glen", filmed in my constituency? Is not Scottish film going to be the start of the renaissance in Scottish jobs and business?

Helen Liddell: My hon. Friend asks an important question and makes an important point. The film industry in Scotland is composed mainly of small businesses, many of which are extremely successful. Ecosse Films, which made XMonarch of the Glen", is a very successful company. I had the privilege of visiting the XMonarch of the Glen" set a few weeks ago. I am very conscious of the fact that as a result of XMonarch of the Glen", 50 million people throughout the world can see how attractive my hon. Friend's constituency is. That helps more than small business; it helps the tourism industry the length and breadth of Scotland.

Iain Luke: Given the initiatives in this year's Budget to stimulate the growth of small business throughout the United Kingdom, such as small business start-up helplines and starter packs, will the Secretary of State undertake to work closely with her colleagues in the Scottish Executive to ensure that both Administrations lend their weight to the creation of more small businesses in Scotland, especially in areas such as mine that suffer from high unemployment?

Helen Liddell: My hon. Friend makes an important point. I agree that we must work very hard to ensure that there is daily co-ordination between national schemes and Scottish schemes. Moreover, this is not just about Government schemes, because Governments alone cannot establish businesses, but about creating the right climate. The Government are creating the climate that helps small businesses to start—low inflation and low interest rates, reform of value added tax and changes to personal taxation—but politicians must make a co-ordinated effort to ensure that entrepreneurship is valued, as it should be. In fact, some years ago, research conducted by Scottish Enterprise revealed that entrepreneurs were classed with politicians and journalists; we have to do something to improve the status of entrepreneurs in Scottish society.

Jacqui Lait: I hope that the question is brief, and that I shall get a brief answer. As new business start-ups are as likely to suffer from fires as any other business, can the Secretary of State tell us whether, when she leaves here, she will urge the First Minister and the Joint Ministerial Committee at No. 10 to make available all firefighting equipment to the troops wherever possible?

Helen Liddell: The Prime Minister has already made a statement on that issue, as has the Deputy First Minister in Scotland. Securing safety for people is a pre-eminent issue, and I share the view of the Prime Minister and First Minister that there is a need for the Fire Brigades Union to accept the recommendation; it should await the result of the independent review.

Jacqui Lait: I understand that the Deputy Minister for Justice in the Scottish Parliament, who is a member of the Labour party, has said that firefighting equipment will not be made available to the troops—

Mr. Speaker: Order. The hon. Lady is out of order. She must stick to the question before us; she should ask a supplementary question about start-ups.

Jacqui Lait: Indeed, Mr. Speaker. Fires will affect small business start-ups just as much as they affect other businesses, so will the right hon. Lady make it clear that she supports making firefighting equipment available to the troops to protect Scottish small businesses and lives?

Helen Liddell: I reiterate the point that I made: the Prime Minister has made the Government's position absolutely clear, and that position is shared in Scotland and the rest of the United Kingdom.

Stephen Hepburn: How can the Minister seriously talk about economic development when in some places the basic business link between Edinburgh and Newcastle is nothing more than a country road? Does not the fact that that road was closed by a little drop of rain today pour scorn on the multi-modal study? I ask the Minister to get in touch with the Scottish Executive and United Kingdom Transport Ministers with a view to building a proper road, dualled all the way from Newcastle to Edinburgh, so that we can achieve proper economic development.

Helen Liddell: I understand that rather more than a little drop of rain has affected the border between Scotland and England. Indeed, my sympathy goes out to all those people who have been inconvenienced as a consequence of the adverse weather conditions. The Government and the Scottish Executive are now putting considerable resources into transport policy, not just in Scotland but throughout the United Kingdom, with a view to ensuring that roads and the rail network are improved, especially the links between Scotland and England.

Unemployment

Mark Simmonds: If she will make a statement on unemployment levels in Scotland.

Anne McGuire: Claimant count unemployment in Scotland is at its lowest level since 1975 and has fallen by more than 57,000 since the spring of 1997—a reduction of 38.8 per cent.

Mark Simmonds: I am grateful to the Minister for her response to my question, but it would be interesting if she could explain to the House how she squares comments made in August by her colleague, the Secretary of State, with the latest figures to emanate from the Scottish Executive. Her colleague said:
	XThese encouraging figures are proof that the Scottish economy remains strong."
	However, the Scottish Executive says that Scottish gross domestic product has reduced by 0.7 per cent. in the first quarter of this year, compared with the rest of the United Kingdom, where it rose by 0.2 per cent. Will not the problems of the contracting Scottish economy be further exacerbated by the introduction of the North sea oil and gas tax, which could cost up to 18,000 jobs in certain areas of Scotland?

Anne McGuire: I am always fascinated when colleagues who represent parts of the United Kingdom other than Scotland seek to talk Scotland down. Data for the past two quarters have, of course, been disappointing, but I hope that the hon. Gentleman will acknowledge that the glitch is temporary and is nothing like the downturns that we saw over the previous 20 years. Underpinning the Scottish economy there is health, vibrancy and energy.
	I use the opportunity to allow the hon. Gentleman to reflect on the fact that the Government's economic policies have created stability and brought many benefits to his constituency, where more than 720 people have benefited from our new deal policy.

Russell Brown: My hon. Friend will be aware of the problems that arose in my constituency last year as a result of the foot and mouth outbreak. At that time, many people were forecasting significant job losses, but unemployment in my constituency is 3 per cent., which is 14.8 per cent. down on last year and about 34.9 per cent. down on 1997. However, I ask my hon. Friend and my right hon. Friend the Secretary of State to impress on our colleagues in the Department of Trade and Industry the need to revitalise the manufacturing sector.

Anne McGuire: I thank my hon. Friend for his question. The area that he represents suffered terribly from foot and mouth disease. I know that he has been leading the campaign to reinvigorate the agricultural industry in his constituency, and I am delighted to hear that there has been a reduction in unemployment. Interestingly, the figures that he highlighted reflect the reduction in unemployment throughout all rural communities in Scotland. When the Government come under pressure about their attitude to rural communities, we should reflect on the fact that, on average, rural communities in Scotland have seen a reduction in unemployment of more than 45 per cent. I will take up my hon. Friend's specific point about discussions with the Department of Trade and Industry.

John Thurso: Is the Minister aware of the many reported job losses in the oil and gas supply industry, which particularly affect constituencies such as mine, where they have contributed significantly to unemployment? Many would attribute these factors, at least in part, to the changes set out in the Budget. What consultations has the Minister had with the Treasury on royalty? When might we expect a result from the recent consultation?

Anne McGuire: I thank the hon. Gentleman for his question. We must be careful about the figures that have been bandied around about job losses in the North sea. There are job gains—in the new Ardmore field, for example. The hon. Gentleman knows that there is ongoing consultation. A report will be made available soon.

Eric Joyce: My hon. Friend will be aware—unlike those in Skegness, perhaps—that since 1997 unemployment in my constituency has dropped by 30 per cent., and long-term unemployment by 70 per cent. Does she agree that it is important to focus on providing additional support through the new deal to those who are still unemployed?

Anne McGuire: My hon. Friend is correct. The new deal has been one of the Government's success stories. Wherever Members go, they will come across people who have been long-term unemployed, who were thrown on the scrapheap because they have disabilities or because they are lone parents. It was rich of the Conservatives to say at their conference that the war on lone parents has been ended. The reality is that they left many vulnerable people on the unemployment scrapheap.

Michael Weir: The Minister will be aware that Scotland has the second highest unemployment of the nations and regions of the United Kingdom and that the Scottish economy is in technical recession. Would she like to revise the statement that the Secretary of State made last November that the Scottish economy is performing well? Does she agree that Scotland is under-employed, rather like the Secretary of State?

Anne McGuire: No.

Michael Connarty: I am sure that my hon. Friend accepts that Opposition Members talk a lot of nonsense purely for the sake of publicity—they are always talking down Scotland. As one who is deeply involved in the oil industry, does she accept that analysts say that the Scottish economy, and the oil industry in particular, are riding out the world recession very well? That is seen in the chemicals industry in her own area, where Avecia is applying for a biotechnology research park. The future is there and the companies are going towards it—unlike Opposition parties, who are running away from it.

Anne McGuire: My hon. Friend is right, and, knowing that he represents Grangemouth, I bow to his superior knowledge of the petrochemicals industry. I recently held discussions with senior oil industry people and I know that they are extremely optimistic about what can still be produced from the North sea by introducing new technology and finding different ways of accessing North sea resources. Like my hon. Friend, I am really weary of hon. Members trying every month to talk Scotland down.

Jacqui Lait: What message is sent to the unemployed when the PA to a Scottish Minister is put up for two nights in a five-star hotel, paid for from a fund that is supposed to benefit the people of Lanarkshire?

Anne McGuire: That is not a matter for the Government; it is a matter for the Labour party. The hon. Lady should not have gone down that path at a Question Time that is intended to highlight the issues that affect Scotland—jobs, education and employment, in which the Government are scoring a great success.

Debt

David Marshall: What plans she has to help combat poverty arising from debt in Scotland; and if she will make a statement.

Anne McGuire: We are consulting on a major overhaul of the Consumer Credit Act 1974 to provide better safeguards for individuals taking on borrowing commitments. We are determined to tackle abuses by unscrupulous lenders head on.

David Marshall: Is the Minister aware that last year the citizens advice bureaux service in Scotland dealt with more than 160,000 cases involving some #70 million of debt, an increase of #10 million on the previous year? Credit unions and money advice centres also deal with several thousand similar cases each year. Given that responsibility for dealing with debt lies with both the United Kingdom and the Scottish Parliaments, does she agree that the best way to deal with that serious problem might be to draw up a joint parliamentary strategy between Westminster and Holyrood, as suggested by Citizens Advice Scotland; and will she take steps to ensure that that is done as soon as possible?

Anne McGuire: Like my hon. Friend, I am a great admirer of the work of citizens advice bureaux, and I was especially pleased to be able to speak at their annual conference in Scotland in August. In addition, my right hon. Friend the Secretary of State was a volunteer in a citizens advice bureau during a recent volunteers week. CABs do significant and valuable work on debt and with people who find themselves in debt. I agree that the Government and the Scottish Executive should look for ways in which to work together, so I am sure that my hon. Friend will be delighted to learn that the Government, the Scottish Executive and the financial sector are piloting three debt telephone helplines, one of which is in Fife, and seeking ways in which they can provide additional advice and support for those who find themselves in difficulties.

Malcolm Bruce: Will the Minister acknowledge the important role that LETS—local exchange trading schemes—and credit unions play in helping people not only to manage debt, but to avoid it? I am thinking in particular of the Strathbogie credit union in my constituency, which I believe covers the largest rural area of any credit union in Britain. Does she acknowledge that credit unions have a good record of protecting their customers' interests as well as giving them advice, and will she make representations to ensure that the Financial Services Authority does not regulate them in a way that creates excessive charges and means that they cannot operate effectively?

Anne McGuire: I agree about credit unions' valuable work. The credit union in the Raploch area of Stirling provides a very valuable resource. However, we have to recognise that if credit unions in Scotland are to come of age, they need robust financial regulation around them. Work is being done with the FSA and volunteers and staff at credit unions to make sure that they have a robust regime that has the confidence of both creditors and those who want to borrow.

Tony Worthington: Does my hon. Friend agree that credit unions have come of age in Scotland, and none more so than Dalmuir credit union, which now has 7,000 members? It has grown since the Secretary of State opened the new building and it lets out #4 million a year. Scotland leads the way in that, and the biggest credit union in Scotland and in Great Britain is the Scotwest credit union, with more than 16,000 members. That is truly coming of age.

Anne McGuire: My hon. Friend is correct. I know that my right hon. Friend the Secretary of State helped launch the Dalmuir credit union a few months ago. Yes, both the Government and the Scottish Executive have shown their support for credit unions. They are coming of age. All of us in the House have a duty not just to highlight the advantages of credit unions to some of our more disadvantaged areas, but to encourage people in our more advantaged areas to see the credit union as a valuable way of supporting their local communities.

ADVOCATE-GENERAL

The Advocate-General was asked—

Human Rights

Tam Dalyell: What human rights issues she has dealt with since 9 July.

Lynda Clark: Last week, I appeared in the Privy Council in the case of R v. Her Majesty's Advocate. The case raises important issues, such as the interpretation and effect of article 6 in so far as it deals with the right to have a trial determined within a reasonable time, and its relationship with the Scotland Act 1998. In addition, I have dealt with more than 60 new cases, which have been intimated to me as devolution issues alleging various breaches of convention rights.

Tam Dalyell: In view of the fact that the distinguished Glasgow solicitor, Eddie McKechnie, has taken the case of his client in Barlinnie to the European Court of Human Rights, what is the role of the Westminster Parliament in the Lockerbie case now?

Lynda Clark: There is a special procedure whereby the registry of the European Court of Human Rights would, if it thought fit, in due course make communication to the UK Government in relation to the Lockerbie case, but unless and until such communication is made there is no role for the UK Government.

Trident Fishing Boat Inquiry

Alex Salmond: What her role has been in the re-opened inquiry into the loss of the fishing boat, Trident; and if she will make a statement.

Lynda Clark: I requested and arranged a preliminary meeting of potential parties to the rehearing and their representatives, which took place before the Sheriff Principal at Aberdeen sheriff court on 27 September. I appeared personally to deal with the wide range of preliminary issues. As the hon. Gentleman may recall, I had previously met him in his role as constituency MP and one of the relatives on 25 April, at which time I explained my role and the general procedure that regulates such inquiries.

Alex Salmond: I thank the Advocate-General for her consideration in meeting the relatives with me. As she is well aware, they have waited a quarter of a century to find out what happened to their loved ones in the loss of the fishing boat, Trident. Can she therefore give an assurance, first, that, in so far as it falls within her responsibilities, there will be no unnecessary delays in the inquiry process, and secondly, that the families will have proper legal representation throughout the process through public funds?

Lynda Clark: A vast amount of the delay was caused by the fact that the fishing boat in question was not discovered until relatively recently. So far as it is within my power, I shall certainly do as much as I can to expedite the process. The hon. Gentleman is aware that it involves highly technical work, which is dependent on the seas and the weather, so there will inevitably be further delays.
	Legal expenses and representation is a matter for the Department for Transport, but the matter was raised formally at the preliminary inquiry and it is always open to parties to make representations directly to the Department.

Devolution

Annabelle Ewing: What devolution issues have been raised with her since 10 July.

Anne McIntosh: What devolution issues have been raised with her since 9 July under the Scotland Act 1998.

Lynda Clark: Since 9 July 2002, 67 devolution issue cases have been intimated to me; all but three related to criminal matters, such as the right to a fair trial, the right to silence and undue delay in trial. Of the three civil matters intimated, two concerned professional disciplinary bodies and the right to a fair hearing before them. The third related to planning law.

Annabelle Ewing: As the Advocate-General has explained on a number of occasions in the House that a key reason for her limited number of interventions in devolution cases is the desire to save the taxpayer money, can she confirm the total cost of her interventions to date, and the percentage that it represents of the total cost of her office since its inception?

Lynda Clark: I do not think that I said that cost was a key issue, although it is certainly important. When I handle cases personally—I do so whenever I can—a substantial saving is made, but I regret that the figures for which the hon. Lady asks are not available.

Anne McIntosh: May I say what a pleasure it is to see the hon. and learned Lady in her place? Has she yet had occasion to give advice on the following scenario? The making of an application to extend a Scottish airport would be a reserved matter, whereas planning remains a devolved matter. Which jurisdiction would have the final decision?

Lynda Clark: I am always delighted to see the hon. Lady and I am glad to see that she, too, is still in her place. As I hope she knows, I always try to give her as much assistance as I can, but I regret that I must invoke the parliamentary convention that Law Officers have followed in the House for many years under different Administrations. I am afraid that it is not possible for me to give advice to the House about the various issues that I may or may not have considered.

LORD CHANCELLOR'S DEPARTMENT

The Parliamentary Secretary was asked—

Court Proceedings

Graham Allen: How many (a) lawyers and (b) others were held to be in contempt of court for delaying court proceedings in the last year for which records are available; and if he will make a statement.

Yvette Cooper: The Lord Chancellor's Department does not collate the requested information, but I am informed by the Bar Council and the Law Society that it is rare for lawyers to be held in contempt of court, but that where they are informed of cases, they can pursue disciplinary action. We are looking at new measures to reduce unnecessary delays in the courts.

Graham Allen: I congratulate my hon. Friend and her Department on their input into the criminal justice White Paper, which will be a great step forward for many people, especially in my constituency, who need the nuts and bolts of the criminal justice system to be attended to. Before the proposals are considered in Committee, will she meet Inspectors Emmott, Wilson, Windmill-Jones and Whitmore from my constituency and hear their frustration about some of the difficulties that they encounter when witnesses are intimidated by yobs, youths and others in the constituency and fail to attend court? Will she talk to those people and listen to their concern that certain defence lawyers—not many, but significant numbers—abuse the system? Will she also consider using contempt of court and waiting cost orders to a greater degree in the Criminal Justice Bill when it finally comes before the House?

Yvette Cooper: I am certainly happy to meet my hon. Friend and any delegation that he chooses to bring from his constituency to discuss the issues. He is right that there can be immense frustration among victims and witnesses when court cases do not go ahead on the day for which they are scheduled for trial. About 24 per cent. of trials do not proceed on the scheduled day, compared with 28 per cent. in 1997, so progress has been made but we need to go further. That is why we are considering a series of measures, including different incentives and sanctions for those involved in the process.

David Heath: Delays and adjournments are not entirely the responsibility of defence lawyers. In magistrates courts, they are often due to the distances between courts following closures or the lack of availability of solicitors in criminal practice. May I make a positive suggestion to the hon. Lady? Will she consider applying a new rule to the Crown Prosecution Service requiring that all cases be prepared at least 36 hours before the listing of a case? Such a rule would ensure that all parties can be advised in due time if difficulties arise and that a costly adjournment that is pointless to everybody concerned can be avoided.

Yvette Cooper: The hon. Gentleman is right that there are a series of reasons why cases do not proceed on the scheduled day, including the failure of witnesses and defendants to show up. About 6 per cent. of trials in 2001 did not go ahead on the scheduled day because either the prosecution or the defence said that they were not ready on the day. We are considering a series of ways of improving case preparation, involving judges, lawyers and other court users. Part of the issue is that nobody takes responsibility when the case does not go ahead on the day. We need to specify who is responsible in what circumstances and what the different sanctions or incentives might be when something goes wrong. That is what the case preparation project is dealing with and I shall certainly take on board the points that he made.

Andrew MacKinlay: We have not mentioned one matter: the cover-up in the courts, to which we cannot refer in the House of Commons. Under the contempt rule, we cannot draw attention to cases that have been delayed by wealthy, greedy barristers who cannot agree their diaries. Cases have been drawn to my attention that I cannot mention on the Floor of the House because of our arcane contempt rules. Will the Minister go to the relevant file and discuss with the House authorities whether, without trespassing into the substance of criminal cases, we can, as custodians of the public purse, at least draw attention to the fact that the legal brethren are manipulating their diaries and maximising their profits and earnings at the expense of justice delayed?

Yvette Cooper: I shall certainly look into my hon. Friend's points. Anxieties have been raised. For example, last year's Audit Commission report stated that
	Xthe current fee structure for lawyers may be seen to offer an incentive for legal representatives to prolong cases in the judicial process unnecessarily. That could be countered by the establishment of a culture in the courts that challenges inadequate preparation and measures the performance of lawyers, and a payment scheme that rewards the expedition of cases where possible."
	We are keen to consider such matters as part of the case preparation project. There is a series of different issues involving the courts, the police and other players. However, I shall certainly consider my hon. Friend's points.

Comprehensive Spending Review

Vincent Cable: If he will make a statement on the implications of the comprehensive spending review for the performance of his Department in relation to IT.

Yvette Cooper: The comprehensive spending review set out plans to invest more than #1 billion in IT in the criminal justice system over the next three years. The Lord Chancellor's Department, the Home Office and the Office of the Attorney-General have been working together to determine the best spread of investment throughout the criminal justice system. Those discussions are not yet complete, but we expect the programme to include IT infrastructure in the Crown courts, the development of exhibit and the investment for magistrates courts that is already under way.

Vincent Cable: Does the Minister's answer imply that she accepts the criticism of the Master of the Rolls, Lord Phillips, who said that the Department was seriously at fault for under-investing in IT in the courts, such that the Lord Chief Justice's reforms are being seriously imperilled and there is a major pile-up of costs and delays in the civil courts?

Yvette Cooper: We certainly believe that there is a need for more investment in IT infrastructure, not only in the courts but in other parts of the criminal justice system and on the civil side. We are making progress in using IT. For example, the money claim online service, which allows people to issue claims over the internet, is proving a great success. The number of cases that now go through it means that it is the fourth largest county court in the country. Progress is being made, but it takes time to put in place the new infrastructure and IT that we need.

William Cash: Does the Minister accept that it is a matter of using IT not only in her Department but in other Departments such as the Home Office? She knows that not enough progress has been made in reducing unnecessary delays in the court system from arrest to sentence. Surely the time has come to embrace the concept of modern IT strategy, which will assist with the more effective disposal of cases and reduce the alarming proportion that is unnecessarily discontinued. Will she make a pledge to use it more effectively?

Yvette Cooper: I am glad that the hon. Member for Stone (Mr. Cash) is present; we heard that the hon. Member for Surrey Heath (Mr. Hawkins) had taken over his responsibilities. I am glad that the hon. Member for Stone remains in his place; I imagine that he would be reluctant to give up being the shadow spokesperson for the Lord Chancellor's Department's new responsibilities for referendums and European elections.
	I welcome the hon. Gentleman's support for IT throughout the criminal justice system. He is right that it needs to be applied throughout the system and that we need to examine the links between the police, the Crown Prosecution Service, the courts, the prisons and so on. That is why all Departments have been working closely together. We are making progress in reducing delays. I draw to his attention that the time from arrest to sentence for persistent young offenders is now 66 days, whereas when the Conservative party left office in 1997, it was 142 days.

Child Contact Centres

Anthony D Wright: What assessment he has made of the adequacy of facilities at child contact centres.

Rosie Winterton: My Department is working with the child contact organisations to survey the current provision of child contact centres. This will help us to identify where the gaps are in provision and how we can improve that provision. The Government are also providing funding of #900,000 over three years to key child contact centre organisations to develop models of supervised contact aimed at supporting those most at risk.

Anthony D Wright: I thank my hon. Friend for that reply. Is she aware that, in a few cases, contact is between not only parents and children but sister and brother? Over the past three or four years, I have been involved in a case in which the sister is also subject to the provisions involving supervision when she meets her brother. What facilities can the Minister offer in rare cases such as this, in which sister and brother also have to meet under supervision?

Rosie Winterton: My hon. Friend is right to draw attention to the importance to children of keeping in contact with their siblings, when it is safe to do so. Through the parenting plan, the Government are encouraging parents who are separating to take that into consideration and to discuss it with their children when appropriate. When a court is considering contact between siblings, the children's views should be taken into account, whether through parents or through reports presented to the court. A child may also be separately represented. Of course, if a sibling is unhappy with a contact order, there are ways in which he or she can challenge it. I should be happy to write to my hon. Friend to set out those provisions in detail, if he would like me to do so.

Martin Smyth: I welcome the Minister's statement concerning contact with children, but is she aware of the deepening concern in Northern Ireland, in the courts and among social services and parents, about the lack of secure accommodation for children and young adults who need that particular kind of care?

Rosie Winterton: I am certainly aware of the need for more facilities for supervised contact. Obviously, the issue of secure accommodation is not a matter for my Department, but we are looking into the issue of proper facilities for supervised contact, which is why we are carrying out the current survey. I take on board the hon. Gentleman's comments and shall ensure that the appropriate Ministers are made aware of them.

Gwyneth Dunwoody: Is my hon. Friend aware that, although the contact centres do a really important job, it is also vital that the supervision that they offer is precise? There has been a number of very upsetting cases in which children have been attacked, and I hope that my hon. Friend will look closely at the provision of proper security for children who are already at risk and need to be absolutely sure that they are not going to be put into an even more dangerous position by coming to a centre.

Rosie Winterton: My hon. Friend is absolutely right. This is not only an issue for children; it can be an issue for other family members as well, particularly women who may be bringing their children to contact centres. It is certainly true at the moment that we need to look much more closely at what is available, particularly in terms of supervised contact. We want to work with children's organisations to develop proper methods of determining what is supervised and what is purely supported. Too often, we feel that there is not enough information available. Sometimes, there is not enough information available to the courts about where children are being sent, or about the adequacy of their supervision. This is something that the survey that we are conducting and the work that we are doing with those organisations will sort out.

Criminal Justice

Simon Hughes: What representations and submissions his Department has received in response to the criminal justice White Paper of July 2002.

Yvette Cooper: The Government published the criminal justice White Paper, XJustice for All" on 17 July. Since then, the Lord Chancellor's Department has received 39 responses, the Home Office has received 64 and the Crown Prosecution Service has received four. A wide range of interested parties has responded.

Simon Hughes: Will the Minister ensure that the responses are published as a matter of urgency by placing them in the Library? Will she undertake that there will be time for the Home Office to consider them properly and, possibly, to respond to them—accepting the good ones and giving some public argument about why it rejects the poor ones, a bit like the way in which Select Committee reports are responded to?
	Finally, does the Minister accept that we have not yet heard a good argument for changing the present rule under which previous convictions are not normally before a court because such evidence would prejudice a trial? Will the Government ensure that no such proposal is made unless there is a much better argument for changing the law than anyone has heard so far?

Yvette Cooper: I will certainly engage in further discussions about the responses that we have received—many from individual magistrates replying to letters we have sent them giving details. On previous convictions, the hon. Gentleman will know what was said in the White Paper. The Home Office has been leading a series of consultations and discussions with a range of stakeholders and will report to the House in due course.

PRIVY COUNCIL

The President of the Council was asked—

Modernisation

Helen Jackson: To ask the President of the Council what plans he has to implement reforms of the sittings of the House.

Robin Cook: The Select Committee on Modernisation recommended that the House sit at 11.30 am on Tuesdays and Wednesdays so that questions, statements and opening speeches could take place earlier in the day and there would be a better opportunity to set the agenda on public debate. The Committee's report will be debated in the House next week, and I look forward to receiving my hon. Friend's support then.

Helen Jackson: I am one of those Labour Members who are immensely proud that it was this Government who established the Modernisation Committee and are driving forward a programme for change not just for our own convenience, but for the better working of Parliament and better linking of Parliament with the public. Would it not be a pity if, despite their natural inclinations, Conservative Members who might be inclined to support our modernisation agenda were prevented from doing so next Tuesday?

Robin Cook: I entirely agree that sitting hours should be changed not for the convenience of Members, but to enable us to do a better job on behalf of Parliament and to enable this place to be more objective. At present we take ministerial statements at 4 pm. They constitute major announcements of Government policy. No Member on either side of the House would voluntarily plan a press conference to take place at 4 pm, which in itself is a case for our meeting earlier.
	The other issue raised by my hon. Friend is more a matter for the right hon. Member for Bromley and Chislehurst (Mr. Forth). I recall that on Thursday, when I asked him whether there would be a free vote on sitting hours for Conservative Members, he nodded.

Eric Forth: indicated assent.

Robin Cook: He has now done so again. Regrettably, however, Hansard has problems recording a nod, so it would be helpful if the right hon. Gentleman put his assent on the record from the Dispatch Box today.

Paul Tyler: Is it the President's understanding that should we decide, sensibly, to revert to a more intelligent method of dealing with our business at a more intelligent time of day—that was the arrangement at many times in the past—the earliest that the BBC could broadcast our proceedings would be January, because otherwise Prime Minister's Question Time would appear in the middle of children's programmes? Some Members would think that entirely appropriate; but can the right hon. Gentleman assure us that if the House votes for these important and useful changes they can be in place by the new year, at least?

Robin Cook: I am happy to give that assurance. It is important that those substantial changes, if we vote for them on Tuesday, should be introduced properly. I understand that the Table Office does not feel confident about handling the shortening of the period of notice for oral questions, which we will also discuss on Tuesday, before January. I think it right for us to introduce that at a time when it can be dealt with competently.
	As for the earlier sittings, the hon. Gentleman is right. The BBC has assured us that it can accommodate Prime Minister's Question Time at noon from January, and I therefore propose that we sit earlier from January. I personally believe that that will not just assist the BBC, but will be of wider assistance in ensuring that the media have no excuse for not reporting what goes on in Parliament.

Anne Campbell: Assuming that the House approves the reforms next week, as I sincerely hope will be the case, can my right hon. Friend explain what implications his proposals on the carry-over of Bills will have for private Members' Bills, possibly giving them more time to get through?

Robin Cook: My hon. Friend makes a large assumption about the House agreeing to the proposals. The House will agree to them only if those who support them turn out and vote for them on Tuesday, and that would be my message to those who wish them well. On the question of carry-over, perhaps I should clarify that we are proposing carry-over only for Government legislation, not for private Members' Bills, for which there is a separate specific allocation within our Standing Orders. On the issue of principle, I have never understood why we have a sudden death for every Bill at the end of each Session. We are elected for a four-year Parliament, so it seems quite wrong—[Interruption.] Perhaps I have given away a secret and I should retract that. We are elected for a potential five-year Parliament, so I have never understood why we then carve it up into one-year lumps. If we want to carry out a better job of scrutinising legislation, we need more time and we will get more time only if we escape from the sessional straitjacket.

Patrick Cormack: Does the President of the Council accept that we are elected here to serve our constituents and not the media? Will he tell the House how many people responded to the survey that he conducted during the recent recess and what percentage of those Members were not seduced by his proposals for these ridiculous new hours?

Robin Cook: Of course we are here to serve our constituents. Certainly many of my constituents think that we are rather odd and eccentric when we sit here until 10 o'clock and occasionally until midnight, whereas we could be working normal, reasonable hours. Of course, our constituents know about us through the media and it is therefore perfectly proper that we should operate in a way that enables us to communicate with them.
	On the survey, I am pleased to say that five sixths of the House responded. I shall be sharing the figures with the Select Committee when we meet tomorrow, but in the meantime I can inform the House that there is a narrow majority in favour of change. Whether that narrow majority succeeds on Tuesday depends entirely on whether those who support change turn up to vote for change.

Modernisation

Fiona Mactaggart: To ask the President of the Council what plans he has to make proposals to the Select Committee on Modernisation of the House of Commons on the experimental seating arrangements in Westminster Hall.

Ben Bradshaw: The Modernisation Committee recommended in its recent report that Westminster Hall be made permanent, but made no recommendations on the seating arrangements. My right hon. Friend has no plans to propose a change to the current seating arrangements, but he is aware that my hon. Friend preferred the original layout.

Fiona Mactaggart: I am very disappointed by that reply, as I feel that Parliament has been perhaps inadvertently misled on this matter—[Hon. Members: XOh!"] When the original seating arrangement was changed, we were informed that it was an experiment, just as the original seating arrangement had been. I would have expected some assessment of the preferred outcome of the experiment. May I therefore urge the Minister to ensure that such an assessment is conducted if the Modernisation Committee's recommendation that Westminster Hall sittings be put on a permanent basis is pursued?

Ben Bradshaw: Just because the arrangement for sittings in Westminster Hall is to be put on a permanent basis, it does not mean to say that the configuration of the seating is being made permanent. My hon. Friend is absolutely right that the current configuration, although it is continuing, is still experimental and she is as free as any other hon. Member to make representations to the Modernisation Committee. However, I would say to her that, as things stand at the moment, she is the only hon. Member who has expressed that view.

Michael Fabricant: The Minister will confirm, I am sure, that the original design of the semicircular seating based on the Assemblee Nationale was to try to bring a spirit of co-operation between the parties. Has it worked?

Ben Bradshaw: The hon. Member knows that the original configuration was changed because a number of hon. Members, including those who chair meetings in Westminster Hall, complained that it sometimes made it extremely difficult to identify hon. Members who wanted to speak when large crowds of the public were coming in and out. I am not aware that the change to the configuration that my hon. Friend the Member for Slough (Fiona Mactaggart) is not so fond of has resulted in a less consensual atmosphere in Westminster Hall, but if I am wrong I am happy to hear from hon. Members that that is the case.

Written Questions

Ben Chapman: To ask the President of the Council if he will make a statement on plans to allow hon. Members to table written questions during the recess.

Ben Bradshaw: If the House agrees to a parliamentary calendar without a three-month summer recess, there will be less need for questions to be tabled and answered during the recess. The Government and the House authorities have already co-operated this year to ensure that questions tabled shortly before the House rose for the summer were answered during the recess.

Ben Chapman: If one effect of the modernisation proposals is to shorten the period in which we are not permitted to ask questions, to that extent I welcome them. I accept that, hitherto, it has been axiomatic that the House needs to be sitting for us to ask questions, but I wonder whether that is necessarily always so in relation to written questions. In recesses, Departments remain Departments and continue to function, and Ministers remain Ministers. Is it possible to find some mechanism whereby we can ask written questions, at least, when Parliament is in recess? Writing letters does not have the same effect as asking parliamentary questions. Could the Minister consider at least a weekly bulletin of questions during recesses that could be tabled and answered?

Ben Bradshaw: I shall certainly take away my hon. Friend's suggestion, but I ask him to acknowledge that the Government have made significant improvements in the way that the system operates. As he himself says, Members are still free to write letters to Ministers during the recess, and it is expected that those Ministers will reply within 15 working days.

Eric Forth: Has the Minister read the report of the House of Commons Procedure Committee on parliamentary questions? As he will agree, it has a majority of Government Members, as have all Committees. In particular, has he read paragraph 101, which states:
	XWe . . . recommend that with effect from 1 September each year, Members should be permitted to table written questions. We recommend this change should be made irrespective of whether the Government's proposals for September sittings of the House are adopted"?
	The view of the Procedure Committee is perfectly plain. It has looked at this matter on our behalf and has recommended very strongly that there should not be a blanket ban on the asking of questions throughout the summer recess, whatever its length might be. Why is the Minister apparently ignorant of the contents of that report, and if he is not ignorant of them, will he please tell us that he is going to do something about it?

Ben Bradshaw: I am not ignorant of what is in the report, which I have read, and I think that the right hon. Gentleman will be pleasantly surprised when he sees the Government's official response to it tomorrow. However, it is also within the Government's prerogative not to accept all the recommendations of a report from a Committee such as the Procedure Committee. For the reasons that I have already given, we believe that the most sensible way forward is for the House to approve the changes in respect of September sittings, so that we can halve the time during which Members are unable to table questions.

Modernisation

Andrew MacKinlay: To ask the President of the Council what proposals he plans to put to the Select Committee on Modernisation of the House of Commons on improving the system of Select Committees.

Robin Cook: The House debated the report of the Modernisation Committee on Select Committees in May, when it agreed to a large number of its recommendations, including increased specialist staff, better administrative support and a clear focus on core tasks. It is rather early to revisit the topic so soon, but I am always willing to listen to proposals for improvement.

Andrew MacKinlay: After 10 years of serving on Select Committees, may I point out to the President of the Council that—too frequently, unfortunately—some witnesses approach the process with insufficient candour, and that there is often much ambiguity? That is true across the spectrum of witnesses. Is it not time that we introduced automatic use of the oath, so that a person tells the truth, the whole truth and nothing but the truth? Even if I cannot persuade my right hon. Friend on this issue, could the attention of every witness at least be drawn to the Sessional Orders that we pass—to the sound, wrongly, of much laughter—at the beginning of each Parliament? They state that anybody giving false evidence before a Committee will be dealt with with the utmost severity. It is time that we made people focus on this issue rather like a hanging, so that they concentrate on what they must do: show frankness and candour before Parliament.

Robin Cook: I cannot say that I come to the Dispatch Box as a supporter of capital punishment, but I congratulate my hon. Friend on his many years of service on Select Committees, some of which—in fact, rather too many—overlapped with my period as the relevant Minister. Of course, it is important that witnesses tell the truth and the whole truth, and there may be merit in routinely making the Sessional Order available to witnesses so that they are aware of the gravity of the occasion in which they are participating. However, I would hesitate to involve lawyers any more than we have to and would deprecate a situation in which any witness came with a solicitor just in case they ended up committing a criminal offence.

Firefighters' Dispute

John Prescott: With permission, Mr Speaker, I would like to make a statement on the fire service pay dispute.
	I am sure that hon. Members on both sides would agree that firefighters do a magnificent job. We greatly appreciate the contribution that they and staff in the other emergency services make to public protection. They are rightly held in high regard for their professionalism and dedication. As a previous Transport Secretary, I have visited some terrible scenes of disaster and one cannot but admire what the firefighters do.
	Fire service pay is the responsibility of their employers, the local fire authorities, and the Fire Brigades Union. The negotiating process started earlier this year and the FBU lodged its claim on 28 May. It demanded a 40 per cent., no-strings-attached pay increase for firefighters, a 50 per cent. increase for control room staff and a review of the 1978 formula that governed their wages.
	That formula has done a good job over the years. Since 1997, firefighters' pay has increased by 20 per cent. Over the same period, pay for police and teachers has increased by 19 per cent. I assume that is why only two years ago the general secretary of the FBU, Andy Gilchrist, said:
	XOur wages remain ahead of other essential public sector workers precisely because we have maintained the formula".
	The old formula solved the last pay dispute and has kept industrial peace for 25 years. I am sure that the House welcomes that.
	The employers responded to the FBU's claim by indicating that any significant pay increase had to be matched by modernisation. But little progress was made in negotiations over the summer because the FBU refused to consider the employers' modernisation proposals. I want to be particularly clear on one point about the negotiations over the summer: at no point did the Government intervene in the negotiating process. Sir Jeremy Beecham, the leader of the Local Government Association, has made that clear on numerous occasions. I made it absolutely clear that we had played no part in the negotiations when I met Andy Gilchrist on 8 August. He accepted the Government's position, but made it clear that the FBU wanted a 40 per cent. increase and no inquiry.
	On 2 September, the employers offered the FBU a 4 per cent. increase, plus an agreement to establish a new formula that would link increases in firefighters' pay to increases in the economy in general. The employers also invited the FBU to join them in asking for an independent review to be established. They also gave an undertaking that any increase in pay agreed by the review would be backdated to the 7 November pay settlement date. By any standards that was a reasonable offer. Nonetheless, the FBU rejected it.
	It became clear that there was no prospect of a solution being found through the normal negotiating process. The employers made it clear that the negotiations had broken down, and requested a Government review. In those circumstances, the House will recognise that the Government could not stand aside. Fire disputes are different from most disputes. People's lives are put at risk and the Government have a responsibility to secure people's safety. So we acted quickly and decisively.
	On 5 September, just three days after negotiations broke down—and after consultations—we set up an independent review. All sides, including the Fire Brigades Union, were asked for their input on the terms of reference. We secured the services of Professor Sir George Bain to conduct the review. Sir George is widely respected and has enormous experience of industrial relations. He is a former principal of the London business school and a member of the ACAS panel of arbitrators. He was also the chair of the Low Pay Commission. The TUC and the employers nominated one member each to support him. The TUC nominated Sir Tony Young and the employers nominated Sir Michael Lyons. That is an exceptional team to conduct an inquiry, and it is certainly independent. It is a team with the right expertise and the right background to provide a fair and balanced assessment of the way ahead.
	Every relevant body, with the exception of the FBU, has submitted evidence to the review. The review is making excellent progress and will produce a report by mid-December, yet still the FBU refuses to take part in the review, and it has announced a programme of strikes covering 36 days before Christmas.
	The FBU will not even suspend its industrial action until the review has reported. That is despite an offer from the employers to extend the mandate period in which the FBU strike ballot result is valid for another four weeks. If the FBU accepted that offer, it could take action without another ballot if, having seen the Bain report, it still felt that that was necessary. So industrial action is completely unnecessary and unjustified. The FBU's position is simply indefensible.
	I turn now to the plans that the Government have put in place to secure public safety in the event of industrial action by the FBU. Following the FBU's claim and the initial response by the employers, the Government undertook prudent planning on the basis of the FBU's threat to initiate a national strike.
	The fire service is a large and complex operation. It involves some 47,000 firefighters in England and Wales, and more than 3,000 appliances operating from 1,600 fire stations. Our focus has been on taking what steps we can to safeguard life and, as far as possible, to protect property where the normal fire cover is not available.
	Detailed planning began in August and training started on 28 August, before the pay negotiations had broken down. The plans are based on support from the armed services, and the acceptance by the police of additional responsibilities during industrial action.
	There are three main elements to the plans. First, on the assumption that the fire control centres will not be operating during the strike, arrangements are being made for fire service 999 calls to be redirected. Every call will be answered.
	Secondly, emergency cover will be provided by a range of appliances staffed by crews from the Army, RAF and Navy. Nationwide, there will be 827 Green Goddesses, which will be able to provide a basic firefighting capability. There will also be 331 specialist breathing apparatus rescue teams and 59 rescue equipment support teams that will offer specialist skills.
	Thirdly, on Friday, immediately after the FBU's announcement of its programme of strikes, the Government made available basic safety guidance and information to the public and to business. That is being supplemented by a range of other measures such as a public information campaign on radio and television, a mail drop to some 4 million households and a letter to the 15,000 largest businesses giving specific advice on fire safety and general health and safety issues.
	I can assure the House that the contingency arrangements are now in place. If the FBU goes ahead with its strike on Tuesday 29 October, the military and police, assisted by those firefighters and fire officers who choose to continue to work, will be in a position to provide a basic emergency service. Members of the public should continue to call 999 in case of emergency, and each call will receive a response. However, the military will not be able to respond to emergency calls as quickly as the normal fire service.
	The emergency crews will have fewer specialised capabilities than the normal fire service, and they are likely to be unfamiliar with the incident site and the local geography. In this situation, I have messages for the public, business and the FBU.
	I urge the public to take sensible precautions in their homes to prevent a fire occurring in the first place. To managers, safety representatives and others in industry and commerce, my message is to work on the basis that normal activities will continue during the strike. However, the single most important step is to check that all existing fire safety provisions are in place and fully effective. My message to the FBU is, XThink again."
	Despite the wide range of measures that we have put in place, there is no doubt that the risk of loss of life and property will be higher when FBU members are refusing to work. My right hon. Friend the Minister for Local Government and the Regions therefore met Andy Gilchrist yesterday to urge him to clarify the extent to which the union would continue to provide a response to life-threatening incidents, whether house fires, major transport incidents or terrorist attacks. Mr. Gilchrist agreed to consider this with his executive tomorrow and to let the Government have a quick response. I hope that that response will be constructive.
	We face a very serious situation. The House can be assured that I will, at every opportunity, keep it fully informed.

David Davis: I thank the Deputy Prime Minister for that statement and for prior sight of it. I agree with him that we cannot but admire the work that firefighters do. However, I am also glad that he joins me in condemning, without reservation, the strikes planned by the Fire Brigades Union in pursuit of its unsustainable 40 per cent. claim. I hope that he will also agree with me that after more than 20 years of modernisation of the British economy and British industrial relations, now is not the time to plunge back into the dark days of the 1970s, when trade union bosses held the country to ransom and the picket line called the shots.
	Britain is living in the 21st century, yet we stand today on the verge of the first national firefighters' strike since 1977. The threatened Fire Brigades Union strike is a matter of serious national importance that puts lives at risk. Against the background of a significant terrorist threat, the start of the strikes coincides with one of the busiest times of the year for the fire and ambulance services, when bonfire night and Diwali take place. The extreme gravity of the situation transcends normal political debate. Nevertheless, its very seriousness demands that the answers to a number of specific questions are put on the record.
	Last night, a leader of the Fire Brigades Union made it clear on XNewsnight" that it would be Xjust not possible" to maintain current levels of public safety as a result of strike action, irrespective of any arrangements they come to. I think that the Deputy Prime Minister effectively confirmed that point. What are the emergency plans in the event of a major incident, and is the Deputy Prime Minister satisfied with the safety levels associated with them?
	We have known for some months that the strike has been likely. Given that, why is it not possible to enable military personnel to have access to the best equipment for preserving public safety without having to cross picket lines on a daily basis? Is this an issue about crossing picket lines, as the Minister for Local Government and the Regions claimed yesterday, or is it merely one of practicalities, as Downing street claimed this morning? Is the Deputy Prime Minister making any arrangements to ensure proper training and access to modern equipment in the event that the strike unfortunately lasts longer than expected?
	It has been reported in the press that a number of other unions will refuse to operate transport and other facilities—for example, the London underground—on the basis of safety. Clearly, nobody wants any unnecessary risks taken, but neither should this be used as an excuse for what would otherwise be illegal secondary action. This could cripple a series of vital industries from the railways to power stations, from chemical plants to oil refineries. That is unacceptable. Who will take the final decisions on safety? Will it be the Health and Safety Executive, senior fire officers or the Deputy Prime Minister? If it is the right hon. Gentleman , on whose advice will he act?
	Has the Deputy Prime Minister discussed with the fire authorities where the liability lies for fatalities and destruction arising from failure to provide full cover? What is the situation regarding household and other insurance fire cover? Is there a danger that people's household policies will be invalidated and, if so, what will he do about it? The Minister for Local Government and the Regions knows that I gave advance notice of that question.
	The Bain inquiry is not expected to report until nearly Christmas. Throughout its deliberations, the public will be at risk, and there are likely to be fatalities. That is unacceptable. In 1972, the Wilberforce inquiry, meeting night and day, came to a conclusion in eight days flat and allowed the rapid resolution of a bitter national dispute. Will the Deputy Prime Minister make the resources available to ensure that Professor Bain's inquiry comes to an equally rapid conclusion, to allow early resolution of this very serious dispute?
	Finally, given the Deputy Prime Minister's assertion that the Government did not intervene, the other outstanding question is how we got into this dangerous situation and the Government's role in it. I should like the Deputy Prime Minister to confirm or deny whether the account that I have been given is correct. We have been told that the employers' organisation was committed to making an offer on or before 9 July this year. However, on 3 July, at a meeting ahead of the LGA conference in Bournemouth, the Deputy Prime Minister told a number of Labour LGA members and officials that he intended to set up an independent inquiry in the immediate future, and that any settlement above the rate of inflation would not be funded by central Government.
	As a result of that intervention, the employers failed to meet their commitment to make an offer by 9 July. The Fire Brigades Union discovered the proposal for an independent inquiry and lobbied Ministers and Labour Members of Parliament throughout July, culminating in a meeting, without officials, between the Deputy Prime Minister and Mr. Gilchrist in early August.
	As a result, the inquiry was not called until 5 September. Had it been called in early July, the result would be available now and we would not face an impending threat to public safety. Can the Deputy Prime Minister corroborate that version of events? If so, does he accept his personal responsibility for the crisis that the country is facing today? All summer, that problem has been brewing, and all summer the Government have sat on their hands. A few frantic days of activity do not make up for a summer of neglect.

John Prescott: The right hon. Gentleman's last statement about the circumstances of events is totally untrue. As he was not in the country at the time, and facing his own difficulties, he will not know.
	As for the wage settlement, most public authority wage negotiation settlements have been at least twice the level of inflation—that is a gain that those workers have made under this Government, not under the previous Administration—so it would be most unusual for me to oppose that in regard to the FBU, if I were actively involved. It would go against common sense and recorded history.
	On whether I attempted to raise the matter on the day to which the right hon. Gentleman referred—I think that the meeting with the Local Government Association was in Bournemouth—I was there to make a speech. I did not interfere in any way with the firefighters' negotiations. It is true that we have been asked from time to time whether we would fund more than the 4 per cent. that was being offered. We put the ball back with the employers, telling them that it was for them to make a judgment on the wage negotiations. I gave the same advice in the local authority negotiations, which were taking place at the same time and had also reached a difficult situation—I think that they settled for something like 7.9 per cent. over two years. In neither case did I actively interfere with the negotiations; they were settled between the employers and the employees.
	The FBU general secretary raised the matter with me on only one occasion. I had a discussion with him in my office, one to one, in August—[Hon. Members: XAh!"] It is a matter of record. I have said so before. He asked me whether I had interfered in the negotiations, the point being that he had heard the rumour. I made it very clear that I had not and, to be fair to him, he accepted that and has since gone on record to make that precise point. I know that he is making a different point at the present time, but he has made conflicting statements on the formula. Two years ago, he thought that it was a very good formula. That does not seem to be his view at the moment. However, one can have different views and the right hon. Gentleman asked me to comment on the points that he made about that.
	On whether the timetable for the inquiry could have been more rapid, when the general secretary saw me in mid-August he was complaining that the employers had not made any offer and that there was to be a meeting in September. It seemed ridiculous that the employers had not made any offer. We made it clear that they should make an offer to find out whether the firemen would accept it. That was done on 1 or 2 September, as I recall. The firefighters made it clear that they did not want an inquiry.
	My right hon. Friend the Minister for Local Government and the Regions asked the FBU general secretary whether he wanted to contribute to the terms of reference of the inquiry, even though he did not want to participate—this is another contradiction, but we have the letter here. He made it clear that he did not. We made that offer in writing—the letter is available if anyone wants to see it—and in telephone conversation. He chose not to reply. I understood his view, but in those circumstances I could set up an inquiry, about which there was a division, only after the negotiations had broken down, and they broke down only on 2 September, when the FBU rejected the local authorities' offer. In three days, I had established an independent inquiry and it had started its work.
	As to when the inquiry will report, the timetable would be quicker if the FBU was actually co-operating. It believes that a new formula is required, so I presume that means that we should debate it rather than just accepting it. An inquiry is needed so that we can make a judgment. The employers have pointed out that if they are to pay more, they want some modernisation, so there is a dispute about whether modernisation should be tied to pay increases. We believe that the two are connected and that an independent study should consider them. The inquiry is due to report in the middle of December.
	If the FBU now wants to give evidence to the inquiry, we could ask the chair to consider that and we might be able to hurry up the process. It is difficult for an independent chair, who is being attacked by the Fire Brigades Union for not knowing about the circumstances, to give them due and proper consideration in the inquiry, but that is what we have been doing.
	The right hon. Member for Haltemprice and Howden (David Davis) asked what we had been doing about insurance liability. We have had some discussions with the people involved and they are continuing. The situation is not yet fully satisfactory and I shall report to him when my right hon. Friend the Minister for Local Government and the Regions has concluded those discussions.
	In respect to safety, we cannot offer a service as good as that provided by the firefighting service. There is no doubt about that; we have never hidden that fact. Green Goddesses of that age cannot begin to provide the sophisticated service offered by modern fire machines. We accept that, but we will do all that we can to assist, as is right.
	Some trade unions have pointed out that the situation is unsafe and cite health and safety legislation. That is fine, but that legislation, passed by the House, gave independence to the Health and Safety Executive to make objective judgments about safety. I take advice from the HSE, as the legislation requires, and the unions, too, should stand by its objective judgment and not make it an excuse to extend the strike.

Don Foster: I, too, thank the Deputy Prime Minister for his statement.
	Will the right hon. Gentleman assure the House that in all his subsequent actions, the safety of the public will be of paramount importance? Does he acknowledge that, as much of the legislation relating to the fire service dates back to 1947, the Government could have taken action earlier to modernise the service?
	We share the right hon. Gentleman's admiration for the work of our firefighters, but does he acknowledge that, even without changes in their terms and conditions of employment, they deserve a better deal? Does he acknowledge that the employers have already made an offer that is more than the rate of inflation and have agreed that they will backdate the recommendations of the Bain inquiry, subject to additional funds being made available by the Government? Will the Government give an assurance today that they will provide whatever funds are recommended by the Bain inquiry? If those assurances were given, does the right hon. Gentleman agree that the strike would be unnecessary, counter-productive and life-threatening?

John Prescott: I think that the strike would be counter-productive and there is no doubt that it would be life-threatening. That is why we appeal to the trade union to take part in the inquiry. I recall disputes in which trade unions were actually fighting for an inquiry. In this case, an inquiry was guaranteed right from the beginning.
	The hon. Gentleman rightly points out that there has been considerable modernisation in the fire service. If we compare the money given during the first five years of the Labour Government with the money given during the last five years of the previous Administration, we see that there is a considerable difference in the resources not only for local authorities but also for fire brigades.
	The hon. Gentleman points out that firefighters need and want a better deal. Everyone has acknowledged that the present formula is not acceptable and says, XLet's discuss another formula." There has not been a strike in the fire service for 25 years and the House should welcome that as the contribution of a professional force that wants fair pay for its work in helping to keep the country safe. We all accept that.
	The hon. Gentleman asks for Government assurances that we will accept the Bain report. The inquiry is independent, and it has to judge whether there should be extra pay over and above the 4 per cent. that has been offered, which is twice the rate of inflation. However, if there is to be more than that amount, there would have to be modernisation and changes in working practices. That is why local government wanted the inquiry. If the inquiry comes up with a balanced picture—as is often the way in this country—it will, no doubt, along with whatever pay increases it recommends, make recommendations about modernisation and changes.
	Now, do I have a guarantee that the FBU will say, XOkay; if that's the package, we'll take that package and we'll accept the modernisation"? As a Government, we cannot write a blank cheque to everything, but if a deal is dependent on both parties' accepting it, it is very difficult to say yes or no in those circumstances. We must wait. But we have given our evidence; the FBU should give its.

Bridget Prentice: My right hon. Friend has said twice that Andy Gilchrist, general secretary of the FBU, was consulted about the terms of reference of the review. Can he explain to the House, if he knows, why Andy Gilchrist has not participated in the review, and say whether he gave any reasons as to why he would not respond on the terms of reference?

John Prescott: Having spoken personally to Andy Gilchrist in August, and read his statement since—I have no doubt that it is an honest statement—I know that he does not want pay of this form and his 40 per cent. claim to be connected in any way to any change in the organisation of the fire service. It is a straight position. We disagree with it as a Government, and so does local government in those circumstances.
	We did ask Andy Gilchrist whether he would take part in the inquiry. He said no, so we thought that he might be interested in the terms of reference. My right hon. Friend the Minister for Local Government and the Regions rang him and made it absolutely clear, as he also did in a letter dated 3 September, that we invited him to make a contribution to the terms of reference of the inquiry. I believe that Andy Gilchrist has since told people, including some Members of Parliament, that that was never so, but that letter and telephone call are on record; he just refused to play a part in it. It is all right for him to take that position if he wants to, but I regret it. I would still encourage him to play a part, because to find a settlement—a just settlement—requires both parties to the dispute to give evidence.

Angela Browning: The evacuation of hospitals, hospices, residential and nursing homes is patently going to be very difficult. We hear that in the case of emergencies of a certain scale, the firemen will come in and operate the usual vehicles. Would such establishments fall within the category of those that the firemen would attend if a fire were reported?

John Prescott: That is precisely the question that my right hon. Friend the Minister for Local Government and the Regions was discussing with the general secretary of the Fire Brigades Union. The hon. Lady will recall that he had asked me, in the press, to pick up the telephone and put down the megaphone. Most of the statements that we have had have been in the press. We did pick up the phone on Monday and dial four numbers in the office of the Fire Brigades Union. There was no one to answer them, but we eventually made contact.
	When that offer was made, it was to discuss the very issues that the hon. Lady raised. We wanted to ask, on serious fire issues, whether the firefighters would play a part, make the vehicles available and attend. We have had the first meeting with Andy Gilchrist and asked him whether he would consider that. There is some consideration regarding the TUC formula on these matters and the agreements and the code of conduct that would operate in the essential public services. He has offered to put the matter to his executive and he will report back to us on Thursday.

Dennis Skinner: My right hon. Friend, like me, has been involved in a number of industrial skirmishes over the past 30 years. Some we have won and some we have lost, and his presence here today is partly due to what happened way back in 1966. All that I would say—I hope that my right hon. Friend will comment—is that in all those disputes there were statutory incomes policies; in this one there is not. Notwithstanding that, the Government may win a skirmish but they might lose in the long term. I suggest to him that although the union is refusing to do this, that and the other, somebody has to take command. In view of that, I think that it would be useful if the Bain inquiry were brought forward, because I was around when the Wilberforce inquiry settled a dispute in just over a week—it was a great victory. In these circumstances, it is important that the Government retain the high moral ground. Governments in the past have been stubborn and won in the beginning, but they can lose in the long term. I hope that my right hon. Friend will bear these thoughts in mind.

John Prescott: That is important, and I shall bear in mind what my hon. Friend says; we can recall the firemen's strike because we lived very close to one of the fire stations at that time.
	At the end of the day, this is about social justice and whether we can arrive at a solution that all parties can live with, not necessarily totally agree with, but when there is such a different approach, we have to find an agreement, which is what inquiries are for. Of course how long the inquiries take depends on how people co-operate with them. I have been involved with a number of inquiries. In the seamen's strike, it took three months to come to a conclusion, but there was an interim report.
	What is happening in this case is that the inquiry is being conducted, but it is taking evidence from only one source. I can only appeal to my hon. Friend to appeal to those in the Fire Brigades Union and ask them why they do not give evidence. The miners did so with regard to the Wilberforce inquiry. What is wrong with that? Someone's case either stands up, or it does not. What is different now is that the lives of our citizens are involved in this situation; it encompasses every one of us, and we must do whatever we can to get people to the negotiating table and to get a fair settlement that is accepted by all parties.

Douglas Hogg: The right hon. Gentleman will understand that most of us think that this impending strike is dangerous and wrong and should be stoutly resisted. Given that, will he say whether he is planning to allow the armed services to train on and use modern fire fighting equipment, which is the property of the nation, not of the Fire Brigades Union? Will he also tell the House whether he might be minded to introduce legislation to prohibit the withdrawal of emergency cover, thus giving statutory reflection to the TUC guidelines?

John Prescott: The right hon. and learned Gentleman always has a legal solution to everything, but that does not always satisfy industrial situations. With regard to access to the vehicles, we must readily accept that it takes three months to train people to use them. I ask him to consider what judgments Governments have to make.
	Should we have started three-months training in the middle of the negotiations and told the firemen, XWell, we are going to get ready because you are going on strike"; or should we encourage people to reach an agreement? There are difficult judgments to be made. Should we go to fire stations, saying, XGive us six of your machines. We want to practise on them in the next three months to get ready for you guys when you come out"? I ask hon. Members to make practical judgments about that. [Interruption.] I admit that these are not lawyers' points, but they are about the reality of industrial relations. In the circumstances, we should say, XRight, we need to get an agreement with you." That is what we are doing, and we have to make a balanced judgment.
	Let us bear in mind that the current industrial relations situation is that the Fire Brigades Union has proposed to strike for two days, then two days and then eight days. Let us hope that will not happen, but there is a period when they will be using those machines at work. So would it not be better for them to have their machines to operate for the community, so that they are not damaged by unskilled workers who may not be sufficiently trained to deal with them, and nothing else happens that might inflame the situation?
	Governments have to make a judgment, and we are accountable to the House. At the moment, what we have done is the best way to find a solution, and that is where we are focused. Let me make it clear that no one should doubt the Government's commitment to secure the safety of our citizens, and we will do everything to ensure that that is achieved.

Colin Challen: May I remind my right hon. Friend that, a couple of months ago in west Yorkshire, a fire tender was called to assist a man who had suffered from a heart attack? That is just one example of the new burdens that are placed on the fire service, showing why it has to be multi-skilled. For that reason, I would support a genuinely independent review, but would it be better if both sides of the dispute did not make statements about what they expected to come out of the review? One side is saying that it must have a certain percentage figure and the other side is saying that there must not be a certain percentage figure. It seems that the independent review will be bound, and it will not have the respect of the general public if both sides to the dispute try to tie its hands in advance.

John Prescott: There is a lot of sense in that, but it is an inevitable part of disputes that people will arrive at figures, one of which will be at one end of the dispute and one at the other, and an independent review is the way to deal with those circumstances.
	My hon. Friend is perhaps referring to whether the Government should say whether a 40 per cent. increase is affordable, but I have to tell him that #450 million is quite a hefty bill, which Governments cannot ignore. Since I have been in this job, local authorities have settled for something like 7.9 per cent. over two years. If #450 million were to come out of the local authority budget, the money would basically be coming from other people's wages and conditions. I must take that into account. I have not made the judgment; I have allowed a committee to make an independent assessment.
	My hon. Friend made a good point when he referred to the fire service attending a heart case. The service now is more of an emergency service than a fire service. It does a great deal of tremendous work and it needs proper equipment. Under our rules there is the absurdity that certain equipment that is needed for the work that the service undertakes is denied to it even though in some instances it does not act as a fire service. There is a need for modernisation. The service needs change. We should provide the necessary resources. We are asking that these considerations should be recognised all together. That is fair and that is right.

Patrick Cormack: As public safety is rightly the right hon. Gentleman's prime concern, will he do two things? First, will he give clear guidance to those in my constituency and elsewhere who are planning bonfire night parties? Will he urge them to be as cautious as possible? If necessary, will he tell them to delay these parties? Secondly, will the right hon. Gentleman rethink his answer to my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) and give members of our highly trained armed forces whose own lives will be put at risk when using Green Goddesses, some of which are 50 years old, some access to modern equipment?

John Prescott: The House will be sympathetic to concerns about injuries, and sometimes deaths, that occur on 5 November, in or out of an industrial dispute. The timing of the dispute is to have one weekend on strike and the other weekend on strike, it being felt that 5 November is bonfire night. Anyone with any experience knows that there are bonfires during the weekend before bonfire night, the weekend after it and possibly during the weekends leading up to it. I have already talked to local authorities. In some instances they organise municipal bonfires, and I have asked that they make an appeal that perhaps fewer bonfires take place during the weekends to which I have referred, and that municipal bonfires should be attended in the circumstances. We should not get into a controversy about fireworks, because there are strong feelings in the House about that issue. It is a difficult and sensitive time and we will again be appealing to those involved not to take the actions that are being talked about, and to take the chance of co-operating with the inquiry.

Kali Mountford: At the risk of repeating what others have said, I say to my right hon. Friend that public services turn to public harm when a set of public servants, such as firefighters, take such actions. Is it not time they took cognisance of the TUC guidelines to which they signed up, and provided the cover that we would like to see provided? Should not we in turn ensure that the review completes its work early so that we can all be sure that there will be an end to the dispute?

John Prescott: My hon. Friend makes an important point. The TUC code of conduct, to which she referred, came about immediately after the dispute in 1977. It was designed to deal with public services and essential services. It was agreed to by the Fire Brigades Union and the TUC. I know that the executive is meeting tomorrow, and my right hon. Friend the Minister for Local Government and the Regions discussed this with Andy Gilchrist when he met him yesterday. Consideration is being given to these points.

Elfyn Llwyd: The Deputy Prime Minister says that the Government have not interfered in this matter, but it is clear that they have. I shall ask two brief questions. First, when he met Andy Gilchrist on 8 August, did he mention the question of an independent review? Secondly, given that there was interference at that stage, why did it take so long, from 8 August to 1 September, for the Government to ask employers to make an offer, which subsequently was made two days later?

John Prescott: I understand the misunderstanding about dates and local authority negotiations. When I met Andy Gilchrist, I was surprised when he made the point strongly to me. I thought that the negotiations had broken down on 8 August. He said, XNo, we have not been made an offer." That seemed rather silly. When I talked to the local authority negotiators, I asked them, XIs it true that you have not made a final offer? The FBU says that negotiations have not broken down because it has not even been given an offer." The local authority negotiators said, XRight. On 2 September we'll put on the table what we are offering and the union can say yes or no", which it did. I think that that was right in the circumstances. It was a bit unusual that no one asked that an offer should be put on the table, with both parties going around saying that negotiations had broken down. I thought that the part I played was common sense.
	As for whether I asked Andy Gilchrist whether he would co-operate with an inquiry, the local authorities had already made it clear in negotiations that they would go further than 4 per cent. and alter the formula if the firefighters were prepared to co-operate with an inquiry into the modernisation of the fire service. Their view was that there had been many reviews of the fire service, the money had been taken, but little had been done about modernisation; they felt that there should be an independent assessment. I thought that there was a lot of sense in that and encouraged the union to accept an inquiry, but the general secretary made it absolutely clear that he did not want an inquiry—he believed that the union had co-operated in modernisation before and that that was not the issue. He said, XGive me the 40 per cent. or the 50 per cent." and suggested nothing else. I did not push him on that, because I was not involved in negotiations. All I wanted to know was whether he would play a part in an inquiry, to which he answered, XNo."

Claire Ward: What discussions have been held with the Retained Firefighters Union, what assessment has been made of the number of retained firefighters who have expressed a wish to work during the strikes, and what modern appliances might they be able to crew?

John Prescott: We readily acknowledge that, although a comparatively small part of the service, retained firefighters provide an excellent service in the areas in which they operate. They have taken the view that they are perfectly prepared to go to an inquiry and give evidence and that they do not want to take part in the industrial dispute. It is their right to do that and they have told the FBU that. They will have the same facilities as they have at the moment and, presumably, they will provide service even during the periods of industrial dispute. That is their decision.

Teddy Taylor: Does the Deputy Prime Minister agree that the fire safety problem would be far more serious if British industry and commerce managed their fire safety arrangements with the same incompetence as the House of Commons? Is he aware that after 25 months Portcullis House still does not have a fire certificate, and that this morning the fire alarm was activated and the fire doors closed, but owing to a fault the evacuation signal was not given, so no one was evacuated? Will he tell everyone involved in British industry and commerce—and the House of Commons—that the best thing they can do to prepare is to review their fire safety arrangements and make sure they work more effectively than the House of Commons' current arrangements?

John Prescott: The hon. Gentleman will be aware that I appealed to industry and all parties who might be affected by the dispute to do precisely that. As for conditions in the House of Commons, I am glad to say that that is nothing to do with me. No doubt my right hon. Friend the Leader of the House will take the hon. Gentleman's comments into account.

Alan Simpson: The Deputy Prime Minister certainly does not need to take any lectures on trade union rights from Opposition Members. He will remember the days when he was accused of leading
	Xa tightly knit group of politically motivated men",
	when all he was doing was negotiating properly on behalf of his members. In current circumstances, it is difficult to know with whom the FBU should negotiate. Given that negotiations have broken down, is there not a case for intervention by the Prime Minister to accelerate the Bain report and to summon both employers and trade unions to continuous negotiations, so that we can prevent lives and public services being put at risk in an entirely avoidable dispute?

John Prescott: I have some sympathy with that point, but my hon. Friend must remember that the two parties disagree fundamentally on what might conclude the dispute. I have taken the opportunity to provide for an independent inquiry. As for his historical reference to me, at that time I was fighting for an inquiry; the firefighters have got one right away.

Cheryl Gillan: The deputy chief fire officer in Buckinghamshire has rightly been concerned for some time about large warehouses used by the retail industry because they pose such problems for firefighters that, even in normal times, operational pre-planning is required. Has the Deputy Prime Minister made specific arrangements to ensure that the armed forces are fully trained to deal with that extremely hazardous type of warehouse fire? If not, and if no lives are threatened, will warehouses be left to burn?

John Prescott: The hon. Lady will understand that if there are two incidents, one in which lives are threatened and the other in which a building is simply burning down, the choice is clear. If two machines are not available to tackle both incidents, one goes where the greatest threat to human life is present. That is the rule that will apply, but the forces will be trained to deal with every type of eventuality that they may be called upon to tackle.

Michael Connarty: The Deputy Prime Minister may know that I represent the town of Grangemouth, which has the largest integrated chemical and petrochemical plant in the UK. Will any advice be given to the emergency planning teams as to whether such companies should consider rescheduling their production so that the threat, which has already caused two fires and a major explosion on that site in the past three or four years, may be avoided by management?

John Prescott: I understand the point that my hon. Friend makes. I have a similar chemical complex in my own area. He will know that in negotiations with chemical companies, there are special rules and regulations about intensive cover inside the plant, but inevitably the plant is also dependent on outside help from the fire services. In that respect, I am sure that the emergency services will do what they can, but I say to the employers, and I hope that my hon. Friend will say the same to the employers in his chemical plant, that they should make sure that all their safety arrangements are up to scratch, and that they should do their utmost in these difficult circumstances.

David Laws: If the FBU calls off this dangerous strike, which it clearly should do, will the Deputy Prime Minister consider asking the independent review group to bring forward its recommendations?

John Prescott: The FBU has made it clear that it feels that the inquiry is not independent. It must make a proper assessment of controversial matters. That is what dictates the time. If we have a reply by December, I have said and I repeat that if only the FBU would co-operate, perhaps we could consider how the hon. Gentleman's suggestion could be achieved. The co-operation of both parties in giving evidence makes it much easier for an inquiry to make its judgment. Unfortunately, it has been denied the co-operation of the FBU, so every assistance should be given to persuade the FBU to come and give evidence.

Mark Hendrick: Could my right hon. Friend reassure the House of the complete independence of the Bain inquiry?

John Prescott: Anyone who knows Sir George Bain knows that he is a man who makes recommendations and deals with inquiries without courting favour from Government. His recommendations on poverty pay and minimum pay are a good example of that. I trust him; his record is good. I also trust the people advising him.

Simon Burns: Has the Deputy Prime Minister any estimate of the proportion of retained firemen who will be expected to work if there is a strike? Also, have the Government any estimate of what proportion of incidents retained firemen will deal with, and what proportion the armed forces might deal with?

John Prescott: I will keep the matter under review. When I get any information, I will inform the House. It is a difficult issue. There is some dispute about the proportion of retained firefighters. The union says that it is organising for a particular number, and the other body says that it is organising for a different number. We do not know whether the retained firemen will heed the call to strike. It is difficult to make that judgment. As soon as I have any information about that, I will let the House and the hon. Gentleman know.

Kevin Hughes: There can be no doubt that our firefighters do a fabulous job on our behalf and deserve the highest of incomes that can be afforded by the Government. However, I fear that what they are asking for—a 40 per cent. increase in one go—is too much for any Government to contemplate, and they need to get realistic. During 1984, I was a member of the National Union of Mineworkers Yorkshire area executive committee, and we made provisions and gave dispensation to miners to make sure that safety work could be carried out underground and coal could be delivered to hospitals, old people's homes and so on, where it was needed. I cannot for the life of me see the ordinary firefighter sitting back when a disaster occurs in this country and not going to assist. We cannot say often enough that the Deputy Prime Minister must do all he can to ensure that if there is a disaster, firefighters go out there and do what they are best at.

John Prescott: In this House there is no doubt in anyone's mind that firemen feel strongly for their jobs and for safety. They are in that job because they like to do the job, and they are among the few groups of people who risk their lives to carry out their job. I am sure that it is a difficult decision for them to withdraw their labour, and they know that. The possibility of an inquiry was immediately granted so that they did not have to face that choice. I do not deny, as I said earlier, that they may have to make the choice, but not before the settlement date, 7 November. Why can they not co-operate with the inquiry up to that date or until the report comes out? I appreciate that it is a dilemma.
	I cannot ignore the fact that, on the 40 per cent. figure, in my meeting with the general secretary, I said, XYour demand is obviously #400 million" and he said, XNo, it is #450 million." I asked him how the Government should pay for such an increase—a legitimate question for the Government to ask in such circumstances. He said that we had all had a consultants' report and that X amount could be saved in respect of damage by fire. He estimated the figure to be about #600 million and said that we could pay the settlement with that money. Unless the insurance companies have discovered a way of transferring dividends to the Government in order to meet a wage requirement, however, that does not seem a sensible way of dealing with the problem.
	We have not made a decision about the matter and have left the independent inquiry to produce a balanced judgment about the pay to be awarded—we agree to having a different formula—and the modernisation that should accompany it.

Patrick McLoughlin: Both the Prime Minister and the Deputy Prime Minister have said that our constituents cannot expect from the Army the same sort of service as is offered by the fire service. Our constituents have paid money to the fire service for a service that they will not get. What message does the Deputy Prime Minister have for the insurance companies and what discussions have been conducted with them to make it clear that, even though our constituents are not getting the service that they should receive, they are expected to stand by their obligations?

John Prescott: I understand the point that the hon. Gentleman makes. He can be sure that my right hon. Friend the Prime Minister and I are constantly in discussions with parties that will be directly affected by the dispute. On the essential question about insurance payments, which is a general one, I am well aware of what happened in respect of floods, let alone an industrial situation. In those circumstances, the companies did not face up to their obligations. This is a constant problem, but it is not really associated with industrial disputes.

Chris Bryant: Is not the offer of an immediate 4 per cent. pay rise plus any enhancement that may be recommended by the Bain review a pretty good one? Has the Deputy Prime Minister received any explanation of why the FBU is not prepared to accept it?

John Prescott: I think that the general secretary is clear about that. First, he wants the money to be given now and he wants a new formula. We are agreed that he should have that formula, but presumably, we must discuss why the old one is no longer acceptable, even though until two years ago he thought that it was very good. Clearly, he does not hold the same view now. Secondly, he says he does not want any settlement above 4 per cent. to be connected to modernisation. He makes it clear that he does not want any reorganisation or modernisation. He may be rethinking that position—who knows? I hope that he does so and that he will give the reasons why he does not want modernisation. He may be fully justified in holding such a view, but in that case, he should put the evidence to the inquiry, so we can all make a judgment.

Steve Webb: Given that lives will almost certainly be lost if the strikes go ahead, do not the Government have a responsibility to ensure that any eventual settlement incorporates a no-strike deal so that we do not face the same situation again?

John Prescott: The House will recognise that, even with a full fire service, lives are lost. That is tragic and many fewer lives are lost because of the firemen who risk their lives daily. The fact that they came to a voluntary agreement on a formula that gave us 25 years of industrial peace seems good sense. If we can get such agreement again, I will take it.

Bill Tynan: I am sure that my right hon. Friend will agree that, in a dispute of any kind, there are no winners or losers. Everyone is a loser in such circumstances. Does he also accept that the firefighters have expressed the view that the 1977 agreement is outdated and that, on that basis, the review would make a difference if it were implemented as soon as possible? Does he agree that, as a way of eliminating the bitterness that has tended to arise in the dispute, which will create an impossible situation in terms of reaching a settlement, we should be asking the general secretary of the FBU about an acceptable interim arrangement to ensure that no strike takes place in the next few days?

John Prescott: My right hon. Friend the Minister for Local Government and the Regions is meeting the general secretary, and also met him yesterday. He is talking to the executive about some of these matters and will report properly back to us so we can have some discussions. My hon. Friend is right to point out that the formula is no longer acceptable to the FBU. That has been accepted by the local authorities and by us, but if somebody wants a change in the formula, they have to come forward with some ideas that can be discussed in a proper review. It is difficult to comprehend the argument that the formula has produced poor pay for the fire brigade over the past 25 years.
	One can argue that the pay is not good enough or that it should be more when compared with that of others, but two years ago, when the same Andy Gilchrist was general secretary, he said:
	XOur wages remain ahead of other essential public sector workers precisely because we have maintained the formula".
	He is entitled to change his mind, but he cannot claim that the formula failed for all those years.
	By all means, let us discuss the formula, but we also discussed reorganisation for a modernised fire service that meets all the emergency needs, which require the courage, dedication and specialised skills of our fire people. We accepted that in principle, and Andy Gilchrist should sit down and negotiate the matter, as any trade union leader should.

Edward Garnier: I understand that if the retained fire service in Market Harborough decides or has to stop working, the nearest Green Goddess cover will come from Corby, which is some miles away. Will the right hon. Gentleman ensure that in such circumstances, a Green Goddess is stationed in Market Harborough to cover that large rural area?
	When the fire authorities get rid of their modern fire machines after several years, may I suggest that they are taken into Government ownership to replace Green Goddesses? It is ludicrous that we continue to rely on such elderly machines.

John Prescott: The hon. and learned Gentleman makes a fair point and raises a proper concern. We do not know whether retained firemen are likely to operate during an industrial dispute. Many said that they would, and there would not therefore be a problem. However, the hon. and learned Gentleman properly said that matters are more difficult if Green Goddesses have to provide cover. We shall review the position from time to time and consider his interesting suggestion about old appliances.

Joan Walley: First, I want to put on record my appreciation of the work of the Staffordshire fire service and the Staffordshire FBU in my constituency.
	We are all losers in the current circumstances, and it is vital that we resolve the impasse. Will my right hon. Friend consider trying to find an informal channel of communication so that the review that we support can take place before we have to deal with members of the public whose loved ones are lost because of the strike? Will he search for an informal way of getting people back around the table?

John Prescott: I promised earlier that we would do whatever we could to help prevent the dispute. We have offered an inquiry, but there are many other methods, through connections and formal and informal discussions. The Government have not set their face against that. We have made our position clear. We are properly worried about safety and we have taken appropriate measures to deal with it. However, if there is good will on all sides in such a dispute, agreement can be reached.
	I am sure that firemen in many stations throughout the country have made it clear that they support the dispute. They are dissatisfied. I say to them that that has registered with us, but we ask them to acknowledge that it is right for us to negotiate on such matters and reach a fair settlement. If they cannot trust us as a Government, they should rely on the Bain inquiry as an independent method of solving matters. That has been the British way for a long time. It served us well in the past and it will do so in future.

David Burnside: Does the Deputy Prime Minister agree that there is great support and sympathy for firefighters? That has always been the case in this country. They are perceived as decent, providing an essential service and doing a good job. After 11 September and the performance of the firefighters in New York, the service has become one of the most admired in the world.
	Do we not need a more fundamental review of what constitutes an essential service in the wider industrial relations framework? There is a price to pay for such services. If we pay a high enough price, does the Deputy Prime Minister agree that we should consider the possibility of an industrial relations framework that removed the right to strike?

John Prescott: I am not sure, especially in Northern Ireland, whether one can proceed if all parties do not agree. The democratic method of dealing with such a problem is trying to get all parties to agree. I am not sure that making strikes illegal is a satisfactory way to achieve consensus in the community. There is much evidence for that. The recent programme about Orgreave reminded us of the possible consequences of such action. In a democratic system, we try to achieve a balance and find agreement between all the parties.
	The available evidence shows that we manage to get our industrial relations right in this country. Few days are lost through strikes when compared with other countries. That is a credit to those who are actively involved. I prefer democratic accountability and consensus to simply imposing something on a community. The latter is not the democratic way.

Andrew Miller: In recent letters from a couple of firemen, the inquiry has been described as a sham. My hon. Friend the Member for Bolsover (Mr. Skinner) rightly drew parallels with the Wilberforce review, which worked at the time for the people he represented. Will my right hon. Friend use this opportunity to make it absolutely clear to the firefighters and to all the people out there in the country that there is no sham here, and that there is an open, honest offer from the Government to have an inquiry undertaken that has, as it were, parallels with the Wilberforce situation? This is an honest offer from the Government and it is important that the firefighters receive that message loud and clear today.

John Prescott: I hope that the House will believe that I would not appoint an inquiry if it was made up of people who were not independent of mind. I ask Members to judge the record and background of the people involved. To be fair, there have been very few inquiries in this country, under any Administration, that people have not found to be fair, in their judgment. That does not mean that we agree with their conclusions—whether it be Wilberforce or the inquiry relating to the seafarers' strike—but if they produce an honest judgment arrived at by trying to find consensus for an agreement, that is what is important.
	In this case, however, the Fire Brigades Union has not given a fair chance for the inquiry to be independent in that sense. It has given no evidence to it. The incident in which the general secretary of the union went to a private reception and talked to one of the inquiry members as someone within the trade union movement, then released details of that personal conversation to the press saying that the inquiry was fixed, does not make it look as though he wants to co-operate with the inquiry. He has a political position; he does not want to do that. I think that he is wrong. I hope that we can appeal to him to co-operate, but the judgment at the end of the day—this will be as true of this inquiry as of any other—will depend on whether it was a fair inquiry into all the circumstances. Whether it will be a proper one, producing an independent judgment, will be conditional on all parties putting their case. If one party does not do so, there is a great danger that a proper judgment cannot be made.
	That is the view of the Fire Brigades Union, and I say to the firefighters and the people in the fire stations, XLook, what have you got to lose? Wait and see, and then you can make your judgment. Why subject us to a strike prior to the inquiry's findings coming out?" The date of the payment is 7 November. We are having a strike before that date, on which the old formula would have produced 4 per cent., which the firefighters are being given, with other factors involved. That is unreasonable, and the attitude of the union to the inquiry has to be seen against that background. I say to Andy Gilchrist: XThink again, Andy. Let your executives think again. Let us work it out. All the parties want consensus in this country, the inquiry will give us the forum, so think again and come into the inquiry."

Nigel Waterson: Is the Deputy Prime Minister aware that during the last dispute, emergency cover in Eastbourne was provided by the Royal Navy and the Parachute Regiment? Will he urgently reconsider his decision to deny modern equipment to our service men and women? After all, their lives will be put at risk every bit as much as those of the professional firefighters are now.

John Prescott: I would say to the hon. Gentleman that he would not want to put any of those service men and women into dangerous situations and expect them to use sophisticated equipment when they have not been properly trained to do so. That is the reality that we are faced with; that training takes three months. I have explained to the House why we made the judgments that we have. I think that they are the right judgments, and they are the ones for which we will be held accountable.

Points of Order

David Lidington: On a point of order, Mr. Speaker. Last Thursday, during questions to the Department for Environment, Food and Rural Affairs, I asked the Minister, at column 459, when the Government were planning to publish their new contingency plans on foot and mouth disease and respond to the various inquiry reports. The Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Scunthorpe (Mr. Morley) replied that the Government were
	Xunder way with the definitive strategy and contingency plan".
	He continued:
	XThat involves a great deal of consultation and discussion. That is right and proper because we want to be open and transparent about this. We intend to bring forward the completed conclusions as quickly as possible and to encourage as much involvement and debate as possible."—[Official Report, 17 October 2002; Vol. 390, c. 459.]
	Having heard the Minister's reassurances about openness and transparency, I was somewhat startled to see in The Times newspaper this morning a detailed account of what that newspaper described as the
	Xdraft report from the Department for Environment, Food and Rural Affairs, seen by The Times, that is its"—
	the Department's—
	Xresponse to the two official inquiry reports into the disease".
	The newspaper went on to give details of policy proposals such as the use of vaccination and the imposition of duties on farmers to insure against disease, as well as other initiatives such as increased media training for veterinary surgeons and the creation of a dial-in message service called DEFRA Direct.
	May I ask you, Mr. Speaker, whether in the few hours since I gave your office notice of my point of order you have been able to ascertain how information withheld from Parliament appears to have got into the possession of The Times? May I also ask whether you have had any approach from the Secretary of State for Environment, Food and Rural Affairs wishing to come to the House and make a statement, either simply to express her shock and outrage at the fact that a newspaper should have been informed ahead of elected representatives of the British public or, even better, to give Parliament a full account of whatever the Government intend to propose?

Mr. Speaker: I have had no such approach from the Secretary of State. The hon. Gentleman has raised matters that are for a Minister to handle. What I will say is that if there was a leak I deplore that, and I certainly hope that the matter will be investigated.

Andrew Turner: On a point of order, Mr. Speaker. The Secretary of State for Education and Skills misled a Select Committee—inadvertently, I am sure—about her promise to resign if literacy targets were not met.
	During an Opposition Day debate on 2 March 1999, my hon. Friend the Member for Havant (Mr. Willetts) asked
	XWill the Minister commit herself to the Secretary of State's pledge to resign if the Government do not reach their literacy and numeracy targets by 2002?"
	The right hon. Lady replied
	XOf course I will; I have already done so."—[Official Report, 2 March 1999; Vol. 326, c. 948.]
	When the right hon. Lady appeared before the Select Committee of which I am a member on 24 October last year, she was asked whether she would resign if her predecessor's targets were not met. She replied:
	XNo, and I never said I would."
	Would it be appropriate for her to appear either before the House or before the Select Committee to put the record straight, and to take the action that she promised?

Mr. Speaker: That is a matter for the Select Committee and the Secretary of State, not a matter for the Speaker.

National Nutrition

Oona King: I beg to move,
	That leave be given to bring in a Bill to provide for the establishment of a national nutrition strategy; to provide development funding for Primary Care Trusts to address the issue of diet and obesity; to establish a minimum requirement for physical activity in schools; to develop a system of food labelling to enable consumers to identify high-fat foods and total calorie content; and to make it a requirement for health warnings to be displayed on all packaged convenience food with a high-fat or sugar content.
	The arguments for a Government-backed nutritional strategy centre on three facts: the scale of the problem of obesity among adults and children, the health and economic consequences of obesity, and the fact that although obesity—like smoking—is portrayed as an issue of personal choice and action, the Government are in a position to make the healthy choice the easy choice for all our citizens.
	The scale of the problem is alarming and growing. The latest figures quoted by the British Heart Foundation show that 46 per cent. of men and 32 per cent. of women are overweight. Moreover, 17 per cent. of men and 21 per cent. of women are obese. One in five six-year-olds in England is overweight, and one in 10 is obese. One in three 15-year-olds is overweight and the figure for obesity is nearly one in five. In the last decade the percentage of overweight children in the United Kingdom has virtually doubled. The worrying fact is that overweight children are more likely to become overweight adults with reduced life expectancy. Some health professionals are saying that if the trends continue there is a risk that a generation of parents will outlive their obese children. Worse, those from deprived families are most at risk, so social inequalities are involved. People in low socio-economic groups or with manual occupations are more likely to be overweight. Those who are south Asian or from other ethnic minority groups are also more likely to be overweight.
	The health and economic consequences of poor nutrition are grave. Obesity is a risk factor for diseases and conditions such as high blood pressure, raised blood cholesterol and non-insulin-dependent diabetes. Poor diet and inactive lifestyles are thought to account for about 30 per cent. of cardiovascular disease, which is the United Kingdom's largest single killer, and for a third of cancers. Doctors are now treating type 2 diabetes in children; until recently, it was regarded as a weight-related disease of old age.
	According to the National Audit Office, the minimum economic burden to the health service from obesity amounts to #0.5 billion a year—around #2.5 billion a year if indirect costs are included. The international obesity taskforce estimates the cost of obesity in the UK at around 1.5 per cent. of health spend, so obesity is a burden in terms of individual illness, disability and early death as well as in terms of the costs to employers, taxpayers and society.
	As a nation our eating habits are poor, yet food matters from cradle to grave. Beginning with the cradle, there is good evidence that babies are programmed during development in the womb to be susceptible to obesity and related chronic diseases later in life. Breastfeeding reduces that risk, yet the UK has one of the worst rates of breastfeeding in Europe. Children are targeted commercially from pre-school onwards with high-energy-dense foods—foods and drinks that are high in fat and sugars. Sugar is the main cause of dental decay. Evidence shows deterioration in young children's dental health in areas of social deprivation and among ethnic minorities. Only 18 per cent. of children aged two to five eat fruit. Only 14 per cent. eat vegetables more than once a day and there is a long way to go until the majority eat five portions of fruit and vegetables every day.
	Our couch-potato lifestyle is taking over. In England, 55 per cent. of boys and 39 per cent. of girls aged two to 15 are moderately active for at least one hour five or more days a week, but after the age of eight those rates decline sharply so that by the age of 15 fewer than one in five girls is active at that level. I recognise that many hon. Members may worry that they fall into those inactive categories, but I am sure that we all hope that more can be done to encourage greater physical activity in schools.
	In 2001, the US Surgeon General said:
	XMany people believe that dealing with overweight and obesity is a personal responsibility. To some degree they are right, but it is also a community responsibility."
	Community responsibility includes the Government. I believe, as do the Government, that they have a responsibility to ensure that people throughout the UK have a choice of affordable, healthy food, accessible and clear information on the contents of food and access to simple, clear messages about what constitutes a healthy diet.
	I therefore call for action along the lines of that taken in Finland. That was a whole-community approach whereby the food processing industry, farming, voluntary groups, health professionals and the media all contributed to Government strategy. There was monitoring and evaluation throughout, which allowed changes to be made as the programme developed. The result is that national vegetable consumption in Finland has trebled in 20 years; the Finnish diet, once so high in dairy fats, now has among the lowest fat contents in Europe, and after 20 years of action, premature deaths from coronary heart disease have been reduced by more than 50 per cent. That is something that the UK should emulate.
	In the national health service, we need to ensure that the relevant national service framework for specific conditions such as coronary heart disease and diabetes address these issues and that national service frameworks for children bring together action to tackle obesity and overweight. Primary care trusts need to be funded to lead locally through their health improvement plans, and through practical grassroots work such as food co-operatives. We also need to monitor how national action such as the national fruit scheme works locally.
	We need a comprehensible system of food labelling, and standards such as that proposed by the World Health Organisation, with bands of high, medium and low levels of fats and sugars. However, it has to be said that vested interest groups have systematically opposed that. We need to develop and implement a comprehensible system of food warnings on high-fat and sugar-prepared foods. We need to protect children who are targeted in the marketing of high fat and sugar foods and drinks—from breakfast snacks and cereals, to confectionery, and takeaway and prepared meals. There is enough good evidence on this—from studies by Sustain: the alliance for better food and farming—in the form of the experience of Scandinavian countries, some of which have actually banned children's television advertising or the commercial sponsorship of children's television programmes.
	Physical activity in schools is another area in which we must improve: a minimum requirement should be developed. Although the national curriculum provides for physical education, many children do not have adequate opportunities to be physically active because the school concerned has been allowed to disapply the national curriculum owing to a lack of facilities. That, unfortunately, is another legacy of the great playing field sell-off. The requirements of the national health school standard should be strengthened and monitored through Ofsted. We need transport and planning policies to encourage walking and cycling as everyday means of travel by children and adults.
	I have touched only on some of the strategies that are required if we are to reduce the deaths to which I referred. I welcome the initiative announced by the Secretary of State for Health to set up children's trusts to bring together health and social care in local councils. This is an opportunity for joined-up government. It is an issue that we must take seriously, because the lives of future children depend on it. I want to ensure that we grasp this opportunity for joined-up government, and that we prevent obesity and poor nutrition from needlessly ruining and shortening lives.
	Question put and agreed to.
	Bill ordered to be brought in by Ms Oona King, Sandra Gidley, Siobhain McDonagh, Ms Julia Drown, Andy Burnham, Ms Debra Shipley, Geraint Davies, Dr. Jenny Tonge, Miss Anne Begg, James Purnell and Mr. Tom Clarke.

National Nutrition

Ms Oona King accordingly presented a Bill to provide for the establishment of a national nutrition strategy; to provide development funding for Primary Care Trusts to address the issue of diet and obesity; to establish a minimum requirement for physical activity in schools; to develop a system of food labelling to enable consumers to identify high-fat foods and total calorie content; and to make it a requirement for health warnings to be displayed on all packaged convenience food with a high-fat or sugar content: And the same was read the First time; and ordered to be read a Second time on Thursday 7 November, and to be printed [Bill 195].

Opposition Day
	 — 
	[unallotted day]

Affordable Housing

Mr. Deputy Speaker: I should announce to the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

Don Foster: I beg to move,
	That this House notes that the current crisis in affordable housing has reached such a level that there is a national need for more than 80,000 new affordable dwellings per annum for the next decade and beyond; regrets the failure of the present Government to take earlier action while welcoming additional funding for that housing announced in the Spending Review 2002 and recent measures to tackle homelessness; and believes that urgent action is needed better to link local and regional planning and housing policies, to bring back into use empty properties, to increase the density of housing developments, to encourage local authorities to implement fully PPG3 and to reform the right to buy to prevent abuses of the system, while resisting the Conservative Opposition's proposals for its extension.
	Judging by the amendments to our motion, there appears to be a great deal of agreement about the existence of a crisis in affordable housing, and a recognition that in recent years, inadequate attention has been paid to it. Of course, we could get bogged down in a debate on the definition of Xaffordable housing", and I am well aware that some make a very strong case for the alternative definition of Xsocial housing". However, I hope that we can avoid definitional arguments and address instead the crisis that undoubtedly exists, and which has been brewing for many years.
	Party manifestos of the past 50 years have promised action. It is interesting to note that the 1950 Labour party manifesto stated:
	XThe demand for new homes is pressing. We must move forward until every family has its own separate home, and until every slum is gone."
	In 1966, the Conservative manifesto called for the following:
	XIncrease council house building for slum clearance. Expand the work of housing associations, so as to provide more good homes, at reasonable prices."

Julian Lewis: I thank the hon. Gentleman for his courtesy in giving way. While he is on the subject of manifestos, what has he to say about the Liberal Democrats' 2002 alternative Budget, which proposed the infliction of VAT of up to 7 per cent. on all new building? How would that help to increase the supply of affordable housing?

Don Foster: I will answer that in full at some point, but I hope that the hon. Gentleman will not mind waiting until later in my speech. Various Labour and Conservative manifestos have contained many fine words on the subject, but despite that the crisis is mounting. The Deputy Prime Minister honestly accepted that when he said:
	XWe know the problems . . . We . . . recognise in the country and on both sides of this House that we have not done enough over the years. We need more homes where people want to live, near where they work, in the north and in the south, at a price that people can afford and in a way that protects our countryside."—[Official Report, 18 July 2002; Vol. 388, c. 442.]
	That is a clear admission that enough has not yet been done. Fine words in manifestos and on the Floor of the House have not led to sufficient action to prevent the problem.

Andrew Love: As the hon. Gentleman is speaking about manifestos, I wonder whether the Liberal Democrat manifesto at the last election included a commitment to provide 80,000-plus new affordable dwellings, as suggested in the motion.

Don Foster: The manifesto proposed a range of solutions for the crisis that I am describing. If the hon. Gentleman will bear with me, I shall list several measures that were contained in the manifesto that would—I am sure he will agree—be sufficient to solve the problem. I hope that we will see much agreement across the Chamber tonight.
	What do the problems mean in real terms for real people? In Friday's Evening Standard, I read about Emily Hill, aged 27, who teaches at Forest Hill school in Lewisham, where the shortage of affordable housing is acute. She earns #21,000 a year and is unable to find an affordable home. Indeed, only six new affordable houses have been completed in Lewisham since January. As a result of Emily Hill's particular problem, she may have to leave London.
	The housing problem varies from one part of the country to another. Bath, for example, has increasing difficulty attracting so-called key workers. Applications for teaching jobs are falling dramatically, because potential applicants fear that they will not be able to find somewhere to live. An average home in Bath costs some #160,000, which is nine times the average starting salary for a teacher. Even a one-bedroom flat is likely to be beyond the means of a new teacher. We also have difficulty attracting nurses to our Royal United hospital. For a nurse, the average house price is 10 times his or her likely salary.
	With such house prices, rents have also become unaffordable for teachers, nurses and other young people and families. Before anyone suggests that the Government's key worker scheme will help, I should point out that funds for the scheme are such that only 10 teachers in my constituency are likely to benefit. I question the merits of a scheme that is likely to fuel house prices instead of helping the vast majority of key workers. Surely it would be better to use the funds in building more affordable homes.

Gary Streeter: I am listening carefully to the hon. Gentleman's speech on what is a serious and important issue. Does he agree that it is of immense concern that the Government do not seem to have realised that the crisis in affordable housing afflicts the west country as well as the south-east and London? Is not it a pity that the challenge fund money is not available to us in the south-west, but only to those in the south-east?

Don Foster: The hon. Gentleman is absolutely right. The Government seem to be myopic about the needs of the south-west in many respects. We are losing out in the area that the hon. Gentleman has described and it seems that we will continue to lose out in terms of local government funding and the provision of improved public transport facilities. He gives but one example of the Government's myopia in respect of the south-west.
	In the country as a whole, housing is in a significant mess. More than 80,000 statutory homeless households live in temporary accommodation—the highest figure ever—and 100,000 children become homeless every year. More than 500,000 households are overcrowded. More than 3 million people live in poor housing.
	It is no wonder, therefore, that Jon Rouse, the chief executive of the Commission for Architecture and the Built Environment, should have told the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Select Committee that we have Xa housing crisis" on our hands. He is absolutely right.
	The hon. Member for Edmonton (Mr. Love) referred to the need for specific figures for affordable housing. He is right. Cambridge university's housing and planning research centre estimates that, to meet current and future needs, between 83,000 and 99,000 new affordable homes will be needed every year for the next decade, and well beyond.
	This year, the lowest number of new houses has been completed since 1924. There are far too few affordable homes—more than 80,000 are needed each year, but fewer than 20,000 will be added to the stock this year. Although some 10,000 additional properties have been acquired, converted or rented for affordable housing, even that means that there will be only 30,000 extra homes, compared with the need for well in excess of 80,000.

Bob Spink: The hon. Gentleman is right to bring this matter to the House's attention. It is most important, especially for my constituents. Does he agree that it would be a good idea to extend the right to buy to certain categories of housing association members, provided that all the receipts went towards the building of new social housing? Would not that be a way to secure the extra social housing that is so badly needed?

Don Foster: The simple answer to that question is no, it would not. I apologise for giving so many similar replies, but Conservative policy on right to buy is of great interest to the House, and I shall return to it in some detail later.

James Gray: Will the hon. Gentleman give way?

Don Foster: Go on then.

James Gray: I am most grateful to the hon. Gentleman, who is my near neighbour. [Interruption.] That was close. My mobile telephone nearly rang. I shall put it down.
	The hon. Gentleman mentioned the importance of building large numbers of new houses. How would Liberal Democrat Budget proposals to impose value added tax of 5 per cent. on new build affect that? Surely that would mean that there would be fewer houses, not more of them.

Don Foster: The hon. Gentleman has a problem with his mobile, and with listening to the debate. Had he come into the Chamber slightly earlier, he might have heard us deal with that point. However, the good news is that I have promised to reply in detail to that point later.

Geoffrey Clifton-Brown: Will the hon. Gentleman give way?

Don Foster: Of course.

Geoffrey Clifton-Brown: I am grateful to the hon. Gentleman, who has been generous in giving way. When he winds up his speech, will he also explain the Liberal Democrats' proposals on land value taxation, set out by the hon. Member for Torbay (Mr. Sanders)?

Don Foster: Yes, I will. I shall cheat slightly and leave it to my hon. Friend the Member for Torbay (Mr. Sanders) to catch your eye, Mr. Speaker, so that he can give a full explanation a little later, but I want the House to be aware that I fully support the proposal.
	I have been trying to say for some time that the Government have made some progress, and I pay tribute to them for that. Indeed, the motion notes their recent measures to tackle homelessness and the increased funding made available for housing. I note that the spending review 2002 promises an extra #1.4 billion for housing capital investment by the year 2005–06.
	Additional resources are desperately needed. However, they alone will not solve the affordable homes crisis entirely. We have not yet had a definitive statement on how those additional funds are to be spent. It is difficult to know how much will be used to plug the affordable housing gap. We are conscious that some will go towards the important issues of tackling low demand in areas of the north and the midlands, while some will quite rightly be used to bring up to standard existing housing stock. Shelter estimates that what may remain of the total additional funds that will be available is still likely to lead to a shortfall of between 25,000 and 35,000 new affordable homes each year. Therefore, those additional funds will not, by themselves, end the crisis.
	We believe that a number of other initiatives are needed. First, we need to tackle the scourge of empty properties. It is a disgrace that with 200,000 homeless households in this country we have, and have had for far too long, some 750,000 empty properties. Every region has more empty properties than homeless households, and that is a national disgrace. Urgent action is needed to start bringing back more of those empty properties into use. To do so would make a significant impact on the crisis in affordable homes.
	For example, the southern regions of England have some 325,000 empty properties, more than 90,000 of which have been empty for more than12 months. If all those were brought back into use, they would constitute two years' worth of the required supply of affordable housing in the southern regions. It is, of course, a well- known problem. Indeed, only last week, in answering a question from me, the Deputy Prime Minister said:
	XThe point about empty homes is obvious".
	He also admitted:
	Xwe have not done anything about that."
	Sadly, he is right. Nothing has been done about the scandal of empty homes.
	Many steps could and should be taken. I said last week:
	XIs it not a disgrace that, if someone wants to build a four-bedroomed, double-garage, mock-Georgian house on a greenfield site, they pay no VAT, yet they have to pay full VAT at 17.5 per cent. to renovate empty properties? Should not VAT be equalised for both at 5 per cent?"
	In answer to the hon. Member for North Wiltshire (Mr. Gray) about the implications of an increase in VAT for house building, the net effect of the measures that I have just described, by reducing for renovation and increasing for house building, would be zero. There would be no additional cost to the taxpayer and there would be increased opportunity to bring back many empty homes into use. Therefore, I was delighted when the Deputy Prime Minister, in an uncharacteristic display of generosity to the Liberal Democrats, said:
	XThat sounds like quite a good policy."—[Official Report, 16 October 2002; Vol. 390, c. 300.]
	He went on to indicate that it might even come to fruition if only he could persuade the Chancellor. I hope that he does. However, other steps could also be taken.

Brian Iddon: Will the hon. Gentleman give way?

Don Foster: I should like to make a little progress.
	Local authorities could be given increased powers compulsorily to purchase houses that have remained empty for an unacceptable period. They should also be given powers to charge council tax on such homes. Their powers could be extended still further so that they have the same borrowing rights as housing associations. We should also introduce site value rating, a point on which my hon. Friend the Member for Torbay will elaborate, if he should happen to catch your eye, Mr. Deputy Speaker.
	Second homes are another problem, often remaining empty for far too long. Ending council tax relief on such properties, as we have long proposed, would encourage owners to make better use of them, perhaps renting them out when they would normally lie empty. The Government have promised to adopt this policy, but so far we have not heard when. It was expected to be included in the draft local government Bill, but it was not. I hope that we will hear from the Minister today precisely when the Government intend to introduce that Liberal Democrat policy. I hope that we may also hear her say that she is willing to go still further on second homes. In some sensitive parts of the country, the requirement for local authority planning consent for a change of use for a second home would be very welcome.
	We can make better use of empty properties and we could also make better use of land, and I do not mean any further encroachment into the green belt.

Chris Grayling: Will the hon. Gentleman set out his views on the Government's plans for substantial investment in affordable housing, which I believe were the centrepiece of the Deputy Prime Minister's proposals to the House earlier in the summer? Those would include substantial developments around Stansted airport and Milton Keynes, for example. Does he support that policy?

Don Foster: The hon. Gentleman has heard me say on a number of occasions that the central determination of housing provision is not a sensible way forward. We have long argued that, within a regional framework and regional guidance, local authorities should make such determinations. Therefore, it would be inappropriate for me to pass judgment on the rights and wrongs of a particular housing measure. I hope that I have already indicated, however, that the additional investment from the Government, which is very welcome, will be insufficient to meet all the affordable housing needs and that other measures, such as those that I have proposed and others that I will mention, are vitally necessary.
	It should be possible to meet the need for affordable housing without reneging on the 60 per cent. target for building on brownfield sites. Indeed, it should be possible to increase that target to somewhere in the region of 75 per cent. There can be little argument about the fact that land supply is restricting house provision. We continue to waste land throughout the country because of the density of housing developments. The figures for 2000-01 show an average density of housing of around 25 dwellings per hectare. We have not moved forward for a number of reasons—largely, inertia and resistance to change on the part of local authorities and developers and a reluctance on the part of the Government regional offices to intervene to enforce national planning policy guidance. If the sites developed for housing in the past year had been developed at an average density of 40 dwellings per hectare—midway in the unambitious minimum range set out in PPG3— 60 per cent. more housing could have been provided on exactly the same amount of land. The waste of land is a serious issue and it affects the entire country, not only the pressurised south-east.

Geoffrey Clifton-Brown: The hon. Gentleman has come up with an inconsistency. On centralised Government targets, he said that decisions should be taken at a local level, dictated by the local regional assembly via its regional spatial strategy; on the other hand, he wants central Government to intervene on density through the regional assemblies. He cannot have it both ways. Either central Government are going to intervene through the regional assemblies, or they are not. Which is it?

Don Foster: The hon. Gentleman should have read the wording of the motion and listened to what I said. I spoke of the need to encourage local authorities to accept guidance. I did not suggest that the policies should be imposed.

Gary Streeter: Send them flowers.

Don Foster: Sending flowers might help some local authorities, but probably not those that are Liberal-Democrat controlled.
	I would pursue the argument about the importance of the revisions to PPG3 with the hon. Member for Cotswold (Mr. Clifton-Brown). I am well aware that his party and mine accepted that the Government's revisions to that policy were very welcome. We have argued that, where possible, local authorities should adopt those recommendations. The sad truth is that the Government are not doing enough to encourage local councils to adopt them. For example, we know from research that about 37 per cent. of councils have not bothered to update their figures for available brownfield sites. We also know that, sadly, many local authorities have not done enough, or what is recommended in PPG3, to link their planning policies more carefully with their housing policies. Much more work needs to be done to encourage local authorities—not to force them—to accept the recommendations.

Adrian Flook: Will the hon. Gentleman give way?

Don Foster: No, I want to make some progress.
	There would be widespread agreement that more work needs to be done. I also suspect that there would be agreement as to the need for the privately rented sector to play a greater role in meeting the need for affordable housing. I note that the Conservatives' amendment refers to that point, although they might not agree with some of the measures that we think should be introduced to assist in increasing that role—for example, the use of tax credits to encourage landlords to provide accommodation at sub-market rents.
	However, the hon. Member for Cotswold and I might agree that we can see no way at all in which the latest announcements about revisions to housing benefit can help. As my hon. Friend the Member for Northavon (Mr. Webb) has pointed out, the Government seem to believe that there is a world in which those on housing benefit are happy tenants, surveying a wide range of quality affordable accommodation with the opportunity to sit down with landlords to discuss the rent over a mug of coffee. That is certainly not the world in which I and many of my constituents live.
	Much help could also be given to enable the private sector to work with others. There are many useful self-help and part self-build schemes throughout the country that need more encouragement. I draw the Minister's attention to the excellent habitat for humanity team, which is doing good work in Southwark with the private sector, the local authority and would-be tenants to develop and build affordable housing in the area.
	There will not be agreement, however, about the right to buy. I return to the question put by the hon. Member for Castle Point (Bob Spink). More than 1.5 million houses have been sold under the right-to-buy scheme since it was introduced in 1980, but the receipts have been wholly insufficient to replace the stock of affordable homes that were lost. In the current year, although 52,000 properties were sold, fewer than 20,000 new affordable homes were built. The Government are right to consider changes, not least to end some of the unacceptable exploitation that currently exists.

Julian Lewis: rose—

James Gray: rose—

Don Foster: I promise that I will give way in a moment.
	The hon. Member for Cotswold referred to one practice as a scam. He said:
	XWhen a local authority has decided that a compulsory purchase order should be implemented, it is totally wrong for developers to be able to come along and make an instant profit."—[Official Report, Westminster Hall, 16 May 2002; Vol. 385, c. 355WH.]
	I entirely agree with him. He is right.
	Sadly, however, that is not the only scam. In this month's edition of London Housing magazine, Julian Blake describes another—a legal exploitation of the rules—which he claims involves about 20 companies in London alone. Those companies cash in on the discount of up to #38,000 offered to tenants exercising their right to buy and sidestep the laws on resale. A company offers cash incentives to tenants to buy under the right to buy, subject to the tenants signing an agreement immediately to vacate the property so that the company can rent it out. The tenants formally sell the house to the company only after the three-year period during which they would normally have to repay the discount. As a result of that scam, valuable homes are being snapped up for private gain at sub-market prices, with the permanent loss of valuable, affordable housing stock. That scam should end. It cannot go on. Rather than row back on the right-to-buy scheme, however, the Conservatives want to extend it.

James Gray: There is no doubt that the type of scam described by the hon. Gentleman must be stamped out. However, does he agree that if he does away with the 60 or 70 per cent. discount under the right-to-buy scheme and replaces it with the 25 per cent. scheme proposed by the Liberal Democrats, it would make homes much less affordable? Secondly, does he recall the Liberal Democrat document entitled XA Home of Your Own", which stated that
	Xwe recognise the benefits that owning a home can bring. We would extend the right to buy rules that apply to housing associations to all . . . housing providers"?
	When did the Liberal Democrats change their view?

Don Foster: We changed our view in the run up to the last general election and we changed it for the reasons that I have given—that increasingly we began to be concerned that in some sensitive areas of the country there were growing problems associated with the shortage of affordable housing. We changed it because we recognised that, under the rules introduced by the Conservative party, there was no possibility that the money released from the right-to-buy scheme would be sufficient to provide a one-for-one matching with a new affordable home. We also recognised that, in any further moves in that direction, such as those which the Conservatives are now proposing, there was no possibility whatever of a matching one-for-one proposal. I therefore believe—

Paul Tyler: Will my hon. Friend give way?

Don Foster: I hope that the hon. Member for North Wiltshire (Mr. Gray) will acknowledge—

Bob Spink: Will the hon. Gentleman give way?

Don Foster: No. I shall just finish answering the question.
	I hope that the hon. Member for North Wiltshire will acknowledge that anyone who is sensible, having reviewed how a policy has worked and its implications and effects, would be prepared to change their mind. [Hon. Members: XWrong."] Sadly, that is what the Conservative party is not prepared to do. It is very interesting—[Interruption.] I hope that the hon. Member for North Wiltshire will listen, because both the leader of the Conservative party and the right hon. Member for Haltemprice and Howden (David Davis), at their recent party conference, announced their so-called Xnew" right-to-buy policy. The right hon. Gentleman said:
	XWe will give more than a million Housing Association tenants the same rights as council tenants to their own homes".
	XNew", for the Tories, is a very flexible word. Most of us would certainly not consider Xnew" a policy first announced in 1979, as it was in the Conservative manifesto at that time.

Bob Spink: Will the hon. Gentleman give way?

Don Foster: No. I will not.
	But 1 million is also, for the Tories, a rather flexible number. They claim that 1 million people will benefit from their policy and yet—I hope that the hon. Member for North Wiltshire will correct me if I have got this wrong, but the figures are very clear—already 300,000 housing association tenants have the right to buy under the 1980 legislation, and 200,000 have the slightly different right to acquire under the 1996 legislation. So for the Tories, for new read old and for 1 million read 500,000.

Paul Tyler: Is my hon. Friend aware that under the Conservative rules, a further scam has taken place in areas of considerable housing shortage, whereby some properties have ended up, under the right to buy, as second homes? Is he also aware that that has exacerbated the situation in areas such as the south-west—Cornwall and Devon? Is he further aware that if the Conservative party's proposals were pursued, it would be central Government dictation to local authorities to do something that they know is completely mad in local circumstances?

Don Foster: I entirely agree with my hon. Friend. That is why, first, we have made the proposal—shortly, we hope, to be accepted by the Government—in relation to council tax subsidy, and secondly why we will continue to urge the Government to introduce the planning requirements at a local authority level for a change of use to a second home.

Geoffrey Clifton-Brown: Will the hon. Gentleman give way?

Don Foster: No, I want to conclude. There is no doubt whatever—

Jeremy Corbyn: Will the hon. Gentleman give way?

Don Foster: No, I have said that I want to finish now.
	There is no doubt whatever that the Conservative party proposals to extend the right to buy are totally uncosted. It is clear that they will never, under their proposals, be able to help to solve the affordable housing crisis. We have a very significant crisis in affordable homes, and it is not just the homeless, the overcrowded, the poorly housed or the poorly paid who are losing out. We all lose out, because if key workers cannot find housing, the crucial public services on which we all depend will collapse.
	Everyone deserves a decent home; it is a scandal that not everyone has one. Despite many fine words—[Interruption.]—although not from the hon. Member for Epsom and Ewell (Chris Grayling), not enough has been done. Now we must act.

Barbara Roche: I beg to move, To leave out from XHouse" to the end of the Question, and to add instead thereof:
	Xwelcomes the additional funding for housing announced in the Spending Review 2002 and recent measures to tackle homelessness; and supports the action being taken better to link local and regional planning and housing policies, to bring back into use empty properties, to increase the density of housing developments, to encourage local authorities to implement fully PPG3 and to reform the right to buy to prevent abuses of the system while resisting the Conservative Opposition's proposals for its extension."
	Let me start on a note of consensus by saying that it is absolutely right that we are debating this important subject today. It is agreed in all parts of the House that this is one of the most vital issues confronting us, and it is good that the hon. Member for Bath (Mr. Foster) has raised it.
	On 18 July, my right hon. Friend the Deputy Prime Minister made a statement in which he set out his aim of achieving a step change in the provision of
	Xdecent, affordable homes for people wherever they live".—[Official Report, 18 July 2002; Vol. 181, c. 438.]
	Our priority is to create sustainable communities and to provide decent homes for all. As the House knows very well, the problems differ in different parts of the country, and it will be very interesting to hear hon. Members' views, which will vary according to the parts of the country that they represent.

Desmond Swayne: Does the Minister agree that one of the problems facing the New Forest is that Whitehall-imposed rules prevent the district council from using its housing budget to build new homes? Instead, it has to renovate its existing housing stock. It cannot deploy its budget to secure more affordable homes. That might be appropriate for northern metropolitan councils that have long neglected their stock, but it is quite inappropriate for a beacon council in the south-east.

Barbara Roche: It is interesting to hear the hon. Gentleman say that—he would not have taken that line during the Conservative years. Let me make some progress, and I shall deal with some of those issues.
	As we know, the solutions to the problem must involve policies, such as those for planning, transport, education, health and regeneration, but this is not just a question of bricks and mortar; we are talking about sustainable communities, yet there is no reference to them in the Liberal Democrat motion. The hon. Member for Bath congratulated us on some things, but he claimed that we had failed to take early action on affordable housing. If he examines our record, he will see that the truth is otherwise. For example, we have already made excellent progress towards delivering our commitment to ensure that every home in the social housing sector achieves decency standards by 2010, and I shall deal with that in a little more detail.

Bob Spink: The hon. Lady will recall the joy in the country when the Government announced earlier this year that they would do away with families in bed-and-breakfast accommodation within 18 months. [Interruption.] I am genuinely trying to be helpful. Is she aware that about 36 families with children are in bed-and-breakfast accommodation in Castle Point? Will she explain the caveats that the Government have now entered into that policy? Will she urge her ministerial colleagues to ensure that they deliver on that much-needed policy?

Barbara Roche: The hon. Gentleman makes a serious point. We are all worried about the problem of homeless families with children living in bed-and-breakfast accommodation. That is why we have set the target. I assure him that I will deal with the problem in a little more detail, because it is so important. I certainly share his view of its importance as my constituency is in London, where the problem is particularly acute, but it also exists in other parts of the country.

Oona King: My hon. Friend has just touched on making affordable housing decent, but does she recall that the Under-Secretary of State for International Development, my hon. Friend the Member for Northampton, North (Ms Keeble), who previously had responsibility for this issue, told the House that she would review the regulations governing overcrowding, many of which date back to 1935? Will the Minister assure us that that undertaking will be honoured, that the review will be conducted and that legislation will be introduced to bring the current rules into the 21st century?

Barbara Roche: I know of my hon. Friend's concerns, and I will look into the issue and write to her about it.

Geoffrey Clifton-Brown: The problem of bed-and-breakfast accommodation, the scale of which has trebled over the past four years, is a real concern to everyone. There is also the problem of rough sleepers. Either now or when the Minister responds to the debate, will she clarify an answer that she gave to a written question from my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) about how many rough sleepers were living on the streets in London. She replied:
	XAs far as we are aware, our information which includes street counts and client lists, suggests that there are no under 16s sleeping rough."
	That does not sound correct. Will the hon. Lady consider that answer and, if necessary, give us a revised answer?

Barbara Roche: I remember the answer well. As the hon. Gentleman would expect, Ministers take their replies to questions extremely seriously. I took the answer to which he refers especially seriously. As far as we are aware, the information is accurate for that age group. It is based on the figures, especially street counts. When young people are found to be sleeping rough, the police and social services are alerted straight away. I know from my contact with the rough sleepers unit how seriously its members take these issues.
	When I refer to the rough sleepers unit, I am talking about admirable men and women who most nights of the year are on the streets of London speaking to people and trying to get them into proper accommodation. I have the greatest respect and admiration for them. I have seen the work that they do. The written answer sets out the best information that we have. If it alters in any way, I shall let the House know.

Mike Hancock: Will the Minister give way?

Jeremy Corbyn: Will my hon. Friend give way to someone on the Labour Benches?

Barbara Roche: How could I resist Islington? First, however, I shall give way to the hon. Member for Portsmouth, South (Mr. Hancock). When I have given way to my hon. Friend, I shall make some progress.

Mike Hancock: I am grateful to the Minister for showing her normal courtesy.
	So that we can follow the debate more closely and understand the Government's latest position on this important issue, will she give us their current definition of affordable housing and tell us who will be able to afford it?

Barbara Roche: I was going on to deal with that. I am sure that the hon. Gentleman will agree that what is affordable in Bath will be very different from what is affordable in Burnley, for example, or other places. The problem is different in London and the south-east. There are other areas of high demand where other issues arise. In the north, particularly, there are issues of abandonment. As my right hon. Friend the Deputy Prime Minister said, it is extremely important that the House comes together to consider these issues seriously.

Jeremy Corbyn: I am glad that my hon. Friend finds Islington irresistible.
	As my hon. Friend knows, I represent an area of enormous housing stress. There is a massive boom in prices and a terrible shortage of affordable accommodation. Is she prepared to have regard to local authorities such as Islington that are deliberately selling vacant street properties, land and existing council buildings to private developers? Islington is doing so partly to subsidise lower council taxes, but also to encourage estate transfer for refurbishment. Does my hon. Friend recognise that such a loss of accommodation removes the dream of a family in a high-rise block with children of living in a house with a garden, which is something that we would all want?

Barbara Roche: My hon. Friend is a neighbouring constituency Member, so I am aware of his experience in these matters. It is worrying if homes that could be made available are being lost. It is clear that all local authorities in London and elsewhere have a tremendous responsibility.
	I was talking about what we have been doing so far, including the action that we have taken on decency standards. By 2005–06, we shall be spending #5.9 billion on housing compared with the planned spend of #1.5 billion in 1997–98. We will—

Lynne Jones: Will my hon. Friend give way on that point?

Barbara Roche: Perhaps my hon. Friend will allow me to make a little progress.
	We shall be setting out a comprehensive long-term programme of action that will meet the different needs of north and south. It will include a major boost for social housing and link policies on housing, planning, transport, education, health and regeneration. I know that we are enjoying a degree of consensus, but I have to say that such a programme is necessary because the Conservative Government did not do enough to meet the housing needs of the current generation, let alone future generations.
	Half a million homes were repossessed between 1990 and 1997. In 1992 alone, more than 1 million households suffered negative equity. Between 1979 and 1997, mortgage rates averaged 11 per cent. Mortgage rates are now less than half the average under the Conservatives. There is still a great deal to do, but it is worth reminding ourselves of the background.

Chris Grayling: The Minister reminds us of the record, but does she accept that, since 1997, compared with what happened under the Conservative Government, a dramatic reduction has occurred in the construction of affordable housing?

Barbara Roche: I am amazed that the hon. Gentleman can say that, given the amount of money that we have put into housing. We also inherited a #19 billion social housing repair backlog and a cut in investment in new affordable housing. In 1996 more than 2 million homes in the social housing sector were substandard.
	I will now take an intervention from my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones), but then I must try to make progress.

Lynne Jones: My hon. Friend is right to point out that the Labour Government have trebled investment in housing since 1997, but that was from an all-time low. A better comparison might be made with earlier years, in particular with spending under previous Labour Governments. She says that we are well on target to meet our aims on decent homes, but will that target be met at the current rate of progress? That has been called into question by researchers such as Christine Whitehead and Alan Holmans of Cambridge university.

Barbara Roche: As I said, we are on target in terms of decency standards in the social housing sector. I shall go into detail later.
	It is because of all the years of neglect that the hon. Member for Bath can claim that 80,000 new affordable dwellings are needed every year, although it is right that we can talk about different numbers—

Geoffrey Clifton-Brown: Will the Minister give way?

Barbara Roche: Yes, but for the last time and only because the hon. Gentleman is a Front Bencher.

Geoffrey Clifton-Brown: I am grateful to the Minister—her generosity is great. She talks about all the years of regret—I mean neglect—but in 1980 we built 108,000 affordable social housing units, whereas last year a miserly 22,000 such units were built. Last year, the Government spent #637 million on affordable social housing, whereas in equivalent terms we spent #2.3 billion in 1992. How can she talk about Xall the years of neglect"?

Barbara Roche: I thought that the hon. Gentleman got it right the first time—when he said Xregret". It would be nice to hear a note of regret from the Conservatives. Let me remind them that, between 1992 and 1997, there was a year-on-year decrease in housing investment throughout the country. At the same time, local authorities were prevented from releasing capital receipts to repair council homes, and council rents more than doubled in real terms—[Interruption.] It is no good the hon. Gentleman chuntering on. That is the truth, even though he would like to ignore it.
	Let me see whether I can return to some form of consensus—the House knows what a deeply caring, sharing and consensual person I am. The real questions facing us are how to get the right housing in the right places, and how to sustain communities that offer an attractive quality of life. Different regions and places have different priorities and need different solutions. That is why we believe that regional planning bodies are best placed to assess the need for open market and social housing in their regions. We need to strike the right balance, providing homes and protecting the countryside, and at the same time ensuring that communities thrive.
	The perspective of sustainable communities is extremely important. It is not simply a matter of how much housing, but how that housing contributes to mixed use and diverse communities. We cannot afford to waste land, as we used to do. I was pleased to hear the warm welcome that the hon. Member for Bath gave to the new PPG3.

Siobhain McDonagh: Will my hon. Friend give way?

Barbara Roche: May I make a little progress?
	The new guidelines have introduced a curb on low-density housing in favour of high densities delivered through good design. We have met the target of 60 per cent. of development being built on brownfield land. I am pleased to see—[Interruption.] I am sure that the discussion is terribly interesting, but I assume that hon. Members have come to take part in the debate. I am pleased to see that the new guidelines are starting to deliver, but the hon. Member for Bath was right to say that local authorities—and let us not forget developers—should do all they can to ensure that PPG3 is implemented.

Siobhain McDonagh: I thank my hon. Friend for giving way. Does she agree that there is no point beseeching local authorities to use much of the land that they have, particularly brownfield sites, when they simply intend not to use such land and to keep it empty for years, as my local authority does in Merton? It is not just a question of money in London, especially south London. It is also a question of access to land. Large ex-industrial sites that will never be used for employment again are kept empty for years, by authorities such as mine, because they are unwilling to reconsider their planning policies. What could the Government do to encourage or force them to do so?

Barbara Roche: I will certainly take my hon. Friend's remarks into consideration. I know how serious the issue is. I was near her part of the world over the weekend, and I know that it is an important issue locally.
	People with reasonable expectations of participating in the open housing market simply cannot afford to do so, because house prices are rocketing. We know that young families on modest incomes cannot set up home because they cannot afford to rent. Homeless people are housed in unsatisfactory temporary accommodation. During the debate, I am sure that many hon. Members will raise the topic of the right to buy and its impact on the availability of affordable housing in London and the south-east.
	Let me make it clear that we have no plans to end or to extend the right-to-buy scheme. However, we are looking at what can be done to tackle abuses, and the effects of the scheme in housing crisis areas. The previous Government acted to help people who needed affordable homes in rural areas by restricting resales of right-to-buy homes. We will act to help people in urban areas who also need affordable homes, but we believe that proposals to extend the right to buy to all housing association tenants would lead to a greater shortage of affordable homes. We, unlike the Conservatives, want to increase supply, not reduce it.

Andrew George: Will the Minister give way?

Barbara Roche: No, I must make progress.
	Our agenda for more housing that people can afford extends to helping our essential public servants, such as nurses and teachers, who in many parts of the country cannot afford a home on the open market. The starter home initiative aims to help 10,000 key workers, particularly teachers, police, nurses and other essential health workers, to buy their first homes within a reasonable travelling distance from their workplace in areas where the high cost of housing is undermining recruitment and retention. We are considering what further resources will be made available for key workers beyond March 2004, when the current starter home initiative finishes. We seek to extend and expand the provision of affordable housing and seek the closer involvement of employers. We are also looking to work closely with registered social landlords in the high-pressure areas of London and the south who are capable of quick and efficient delivery of new stock.
	That is why we recently announced the establishment of a new challenge fund through the approved development programme. We are top-slicing up to #200 million of the ADP in 2003–04 to deliver more housing where it is most needed more quickly and more efficiently while maintaining good value for money.

Gary Streeter: Does the Minister accept that there is a crisis in access to affordable housing to buy in the seven counties of the south-west? Does she accept that the problem is not merely a London or south-east phenomenon? If so, why on earth is the challenge fund not also available to innovative schemes in the west country?

Barbara Roche: The fund is available in some areas where there is high demand, so some assistance has been made available. When all the results have come in, I will ensure that the hon. Gentleman has the available information. The challenge fund is a radical new approach that will encourage housing associations and developers to produce better affordable housing more quickly.
	At the beginning of my speech, I dealt with the problem of decency, to which my hon. Friend the Member for Birmingham, Selly Oak referred. It is worth reminding ourselves of the figures. Some 1.6 million social rented homes were not of a decent standard in April 2001. We are on track to reduce that number by 500,000 by 1 April 2004. Of course, we should not forget that the problems with housing conditions also extend to the private sector. More than 4 million owner-occupied homes and more than 1 million homes in the private rental sector do not meet decency standards. That is why, following the spending review, we have a new objective to increase the number of vulnerable households living in private sector homes that have been brought up to decent standards.
	The hon. Member for Bath mentioned empty homes. I agree that the issue is of great concern and that we certainly have far too many such homes—currently, some 750,000. Although that represents 3.5 per cent. of the housing stock, the figure is still far too high. That is why we are working with local authorities and other partners, such as the Empty Homes Agency, to develop policies and strategies to bring more of the homes back into beneficial use. Last year, we introduced a tax allowance to encourage the bringing back into rental use of empty residential accommodation situated above commercial premises. We also reduced the rate of VAT applicable to the renovation of long-term empty homes.

Julian Lewis: Will the Minister give way?

Barbara Roche: I must make progress.
	I recognise that we need to do more. That is why we are giving very careful consideration to the proposal made earlier this year by the Select Committee on Housing, Planning, Local Government and the Regions in its report on empty homes that local authorities be given powers to take over the management of homes that have been empty for a long time and bring them back into housing use.
	The hon. Member for Portsmouth, South raised the important issue of homelessness, and it would be remiss of me not to deal with it in a debate of such importance. We certainly believe that improving the supply of affordable housing in the next few years will be critical to tackling homelessness in areas of higher demand. We must do more to provide settled housing solutions for homeless families if we are to avoid the long-term damage that life in unsatisfactory temporary accommodation can cause to parents and their children. Hon. Members in all parts of the House will have knowledge about that subject from our experience as local Members of Parliament.
	We must acknowledge that creating more accommodation in isolation will not tackle homelessness. To deal with homelessness more effectively, we must provide more than housing. We must also tackle the reasons for people's homelessness, such as debt, drug misuse, unemployment and domestic violence. That is central to the Government's approach to homelessness.
	Our approach is underpinned by the Homelessness Act 2002, and I was grateful for the welcome that it received. It requires all local authorities to set out the way in which they intend to tackle homelessness in their districts and to outline the resources that they expect to be available to deliver their policies. The deep-rooted problems of homelessness cannot be tackled overnight, but we are making an early start by dealing with one of its worst manifestations: families with children who are forced to live in bed and breakfast hotels. We are committed to working with local authorities. The hon. Member for—is it High Point?

Bob Spink: Castle Point.

Barbara Roche: I must get my Essex constituencies right. The hon. Gentleman raised that matter. We are committed to working with local authorities to end the scandal by March 2004.
	We have strengthened the protection for vulnerable, homeless people through the Homelessness Act and the priority need order. Many charities and non-governmental organisations that work with homeless people have welcomed those measures.
	It is right to discuss other challenges. So far, we have considered those in the stronger housing markets, but we must not forget the weakest. In parts of some towns and cities in the north and the midlands, the bottom has fallen out of the housing market. In those places, we need to promote demand for housing as part of our wider regeneration measures.
	On 10 April, we announced that nine areas had been invited to work with the Government to establish pathfinder projects to tackle low demand where the problem was worst. The projects' aim is lasting solutions to turn around the worst-affected areas. Let me make it clear that tackling low demand and abandonment in parts of the north and the midlands does not simply mean knocking down homes. Although some properties need to be demolished because they are of a type that people simply do not want any more or in areas from which people have moved away, that is not the end of the story. Other physical works will be completed, such as repairing decaying homes and improving the nearby environment. That will be done as part of a unified agenda to improve the area through better job prospects, schools and health care.
	As the Minister responsible for regeneration, I stress that one cannot deal with poor housing in isolation. The key to lasting change in the poorest neighbourhoods is, for example, reducing crime, improving access to good health care, attacking joblessness and improving educational achievements as well as dealing with poor housing. All those aspects must go together.
	The Government have a big agenda. If I may say so, that also applies to the House. We recognise the scale of the challenge. We have a long-term strategy, which acknowledges that the neglect of the past can be overcome only by investing in the future. We are working to fulfil housing need where demand is highest and to promote demand where housing markets are weakest.
	Our solutions will be tailored to fulfil the differing needs of our regions. However, overall, we must have a clear objective: more homes where people want to live, near where they want to work and at a price that they can afford. Housing is at the top of our agenda and we want a step change in our policies for building successful, thriving communities. In short, our aim is providing decent, affordable homes for people wherever they live.

Geoffrey Clifton-Brown: I am pleased to catch your eye, Mr. Deputy Speaker, in such an important debate. I am grateful to Liberal Democrat Members for enabling the House to discuss the subject. The lack of affordable housing constitutes a major crisis that affects all parts of the country. The situation is urgent and serious, and is blighting the lives of millions of people.
	While we welcome the Government's decision finally to do something to help to resolve the crisis, it is the Conservatives' contention that the Government are doing too little to solve the problem and that some of their proposals may well turn out to be counter-productive. [Interruption.] The hon. Member for Hampstead and Highgate (Glenda Jackson) may laugh, but I have some figures. She talks about the neglect of the Conservative years, but I have the figures. She knows perfectly well that 108,000 affordable housing units were built in 1980, compared with a miserly 22,000 last year. That causes many of her constituents misery because they cannot get a house.

Glenda Jackson: Were not the large number of houses that the Conservative party now tries to claim as its own actually part of the previous Labour Government's long-term plan for the development of affordable housing? We simply have to look at what happened in London during the 18 years of Conservative misrule. When the Conservatives came to office in 1979, there were, on average, 17,000 properties being built by local authorities in London. When we came into office in 1997, there was precisely one such property built in the whole of London.

Geoffrey Clifton-Brown: The hon. Lady may live in the past of 30 years ago, but I prefer to live in the present, and to consider what the present Government intend to do. Those waiting for houses will be listening to this debate carefully to see what the Government intend to do to improve their situation.
	The lack of affordable housing hits the most vulnerable members of our society, and the number of priority homeless today stands at 102,650—up a staggering 11 per cent. in the last four years under the Labour Government. Crisis—it used to be called Crisis at Christmas—estimates that the number of hidden homeless could be as high as 400,000. The hon. Lady may not like that figure, but she had better listen to it carefully. If that is the correct figure, it is a scandal. It is the highest number of homeless people that this country has ever seen, and it is a disgrace that we should be in such a situation under a Labour Government.

Adrian Sanders: The hon. Gentleman referred to the organisation that used to be known as Crisis at Christmas. Did it not change its name during the Conservative years from Crisis at Christmas to Crisis all the year round?

Geoffrey Clifton-Brown: I honestly do not think that that point is worth replying to.
	Nearly 81,000 statutory homeless households live in temporary accommodation. We also have the scandal of the number of people living in bed-and-breakfast accommodation having trebled over the last four years. Even worse, the number of homeless children has increased by 11 per cent. in that time. If anyone does not have sympathy with children who are homeless, they ought to think again.
	The problem involves not only those who have lost their homes; the housing situation can also be very difficult for those who have a home. According to Shelter, 518,000 households are officially overcrowded, and more than 300,000 families with children live in overcrowded conditions. More than 3 million households live in poor housing. The Government must take serious steps to address the situation.
	As well as having a devastating effect on people's lives, the lack of affordable housing can also have a crippling effect on the local economy. If the labour force cannot find suitable affordable housing, it is likely to have to commute long distances. The Housing Foundation suggests that, in West Sussex, for example, there are more than 100 job vacancies at county hall. The foundation states:
	XThe eventual consequences of such a situation are not pleasant to consider."
	The hon. Member for Hampstead and Highgate mentioned the situation in London. There, people in their late 20s on average earnings need a mortgage of eight and a half times their income to buy a home. That is why it is becoming very difficult for young people to buy a home in London, where the average house price is now estimated to be #205,000. London is undoubtedly suffering from a major shortage of new housing. The number of households in the capital increased by more than 6 per cent. over the past four years to 184,000. For the first time, the number of new houses has dipped below the number of households being formed, and the number of houses being built in London in the last year for which figures are available was just 58,000.

Chris Grayling: Will my hon. Friend give way?

Geoffrey Clifton-Brown: I want to deal with rural housing, and then I will give way to my hon. Friend.
	It would be folly to suggest that the lack of affordable housing is an issue only in urban areas. If anything, the crisis is greater in rural areas. According to the Countryside Alliance, rural property prices are 15 per cent. above the national average. That means that local people on low wages cannot afford them. This is a real problem for young people who want to remain in our rural villages. Labour Members may well laugh. The hon. Member for Edmonton (Mr. Love) is laughing, but how would he like to be one of those young people who cannot afford to buy a house?

Andrew George: Will the hon. Gentleman give way?

Geoffrey Clifton-Brown: No, I shall give way to my hon. Friend the Member for Epsom and Ewell (Chris Grayling) first, as I said I would.

Chris Grayling: Is my hon. Friend aware that the Government are presiding over a system that actually makes it more difficult to construct new affordable housing in the south-east? The Housing Corporation formulae no longer recognise the possibility that land values could be at the level that they are. My local housing association in Epsom, Rosebery, therefore cannot purchase land on which to build affordable housing because the Housing Corporation will not let it pay the market value for the land. The formulae do not allow it. Is not that an example of the Government presiding over a system that works against, rather than with, some of the most vulnerable people in our society?

Geoffrey Clifton-Brown: I entirely agree with my hon. Friend. I shall come to our proposals for the right to buy in a moment, and we shall need to look at the ratios in those proposals.

Brian Iddon: I am pleased that the hon. Gentleman has mentioned the right to buy in connection with rural villages. Will he state whether the Conservative party would give access to all housing association properties in rural villages through the right to buy, just as it did with council housing? If so, I do not have much sympathy with his comments about the lack of affordable housing in rural constituencies.

Geoffrey Clifton-Brown: I am grateful for that intervention, because it allows me to put on record that we are consulting on that matter, and I am certain that we will wish to retain the current exemption that exists for the right to acquire, namely that rural settlements of under 3,000 people are likely to be exempt. We will consult on the number, but there will certainly be an exemption or a right to re-acquire in very small rural areas. I want to put that clearly on record.

Andrew George: The hon. Gentleman raises the issue of affordable housing in rural areas. Does he regret the previous Conservative Administration's policy of providing a 50 per cent. council tax rebate to second homes in rural areas? That policy added to the inflationary impact of the purchase of second homes in such areas. This year, #200 million of taxpayers' money will be spent subsidising the second homes of the wealthy in areas where many thousands of rural folk cannot even afford their first home. Does he regret that, and would he support legislation to remove that council tax discount and make the money available to provide affordable housing in rural areas?

Geoffrey Clifton-Brown: I am grateful to the hon. Gentleman for that lengthy intervention. I was one of the first Members to ask for local authorities to be given the discretion to charge full council tax for second and part-time homes. I fully support that policy today; it is in line with Conservative party policy to give local authorities in general more discretion to make decisions at local level.

Oona King: Will the hon. Gentleman give way?

Geoffrey Clifton-Brown: I will give way to the hon. Lady because she is sensible.

Oona King: I understand why the Conservative party has supported and introduced restrictions on the right to buy in rural areas. Please will he tell us why that is not applicable, so far as his party is concerned, to urban areas, where there is a desperate shortage of affordable housing as a result of the right to buy?

Geoffrey Clifton-Brown: The hon. Lady tempts me. I will come to the right to buy later, and I will explain why we wish to pursue the policy that we have adopted.
	The crisis of homelessness in rural areas continues to escalate. Since 1997, the number has risen by 13 per cent. and increased at three times the rate of homelessness in urban areas. More than 17,000 rural households are unintentionally homeless and in priority need.

Peter Bradley: Will the hon. Gentleman give way?

Geoffrey Clifton-Brown: No, I want to make some progress, otherwise I will not allow my hon. Friends to contribute. If the hon. Gentleman wants to speak, he can try to catch your eye, Mr. Deputy Speaker.
	There is a drastic shortage of new houses. We are building the lowest number of houses since records began: 160,000 is the lowest number since 1927, excluding the war years. That has given rise to the current housing problems and high market values.
	What would the Conservatives do to address the problem of homelessness and build more affordable housing? First, we would ensure there was enough pump-priming to return brownfield land to use for building. That is critical, because it would stop increasing amounts of our green belt from being swallowed up by concrete. For there is no doubt about it: if the proposals of the Government and the Deputy Prime Minister to build an extra 100,000 houses in the green belt are enacted, more and more of our green belt and green fields will be swallowed up, and once rural land is under concrete it is very difficult to get it back.
	The Government have done two things that have adversely affected the cleaning up of brownfield land. They abolished the derelict land reclamation grant, and they made a muddle of European gap funding. We think some pump-priming is essential to return brownfield land to a state in which developers will want to develop it. The director of the Environmental Industries Commission, Mervin Hyman, recently argued:
	XCleaning up contaminated land is a key part of releasing brownfield sites for regeneration and relieving pressure on greenbelt and rural sites . . . Yet this vital work is being undermined by bad regulation."

Peter Bradley: Will the hon. Gentleman give way?

Geoffrey Clifton-Brown: No, I want to make some progress.
	As the hon. Member for Bath (Mr. Foster) suggested, we shall give careful consideration to the 753,000 houses that are empty. The Minister mentioned a tax allowance to return empty homes above shops to use. Perhaps she will tell us how effective it has been, and how many empty flats have been returned to use. It seems to us that, given the ratio of eight empty houses to one homeless person, there should be some scope to encourage, in particular, institutional landowners with a blanket policy of not letting flats above shops to consider doing so.
	In fact, we want to encourage more private sector investment in affordable homes, full stop. That may require us to examine the current tax arrangements, and to seek changes in housing law. At present, very little private sector investment goes into the residential sector in general, let alone the affordable sector.

Mike Hancock: I do not want the hon. Gentleman to stray too far from his point about pump-priming. He did not explain how the Conservatives would prime the pump. It is important for us to understand how they would overcome the present difficulties in returning brownfield sites to use.

Geoffrey Clifton-Brown: The Conservative party has been the most successful at urban regeneration. Members need only recall our schemes in the centre of Leeds, Glasgow and docklands. They need only recall how we managed to accumulate enough land to make developers want to redevelop it, and how we created the infrastructure to enable them to do so.

Andrew Love: Will the hon. Gentleman give way?

Geoffrey Clifton-Brown: I want to make progress.
	Let us examine the way in which the Liberal Democrats want to reform the housing sectors. It is interesting to look at some of their proposals, such as the equalisation of tax on greenfield sites and renovation of houses. Do they really propose an additional 5 per cent. of value-added tax on houses in the green fields and green belts? In fact, they propose a 5 per cent. and a 7 per cent. rate. Even the lower rate, if imposed on a house with the average price of #153,000, would have a considerable effect. Are the Liberal Democrats really telling their constituents that they will add between #7,500 and #10,000 to the price of each new house? Have they costed their proposal, and established whether it will be tax-neutral? Have they taken into account the VAT sixth directive, which will not allow a zero rate on the renovation of houses and provides for a minimum of 5 per cent.?

Don Foster: Will the hon. Gentleman give way?

Geoffrey Clifton-Brown: Having attacked the hon. Gentleman, I will allow him to explain what he is going to do.

Don Foster: The answer to the hon. Gentleman's question is yes: we are well aware of the directive, and I hope he heard me when I said that we proposed an equalisation of the VAT.
	The hon. Gentleman can attack the details of our policy as much as he likes, but I wish we could hear some detail from him. He has said that he will pump-prime the return of derelict land to use, but has not told us how he will do it. He has said that he will return empty houses to use, but has not told us how he will do that either. Let us at least hear some decent policy proposals, so that we can attack them if we do not agree with them. We cannot do that if we do not know what they are.

Geoffrey Clifton-Brown: I shall deal with our right-to-buy proposals in due course. I am sure that the hon. Gentleman will be interested to hear about them.
	Let me now turn to the hon. Member for Torbay (Mr. Sanders). Not only would he impose VAT on all new houses, thus adding between #7,500 and #10,000 to the price—his constituents will be very interested in that proposal—but on 24 July he said:
	XI am talking about not a development land tax, but land value taxation. It was attempted in the 1920s but sadly, it was blocked for one simple reason: we did not then have a comprehensive land register".
	The hon. Gentleman continued, even more extraordinarily,
	XSuch a tax would raise significant sums and could replace the uniform business rate altogether."—[Official Report, Westminster Hall, 24 July 2002; Vol. 389, c. 277WH.]
	The hon. Gentleman proposes to tax developers at a rate of about #50 billion. How does he expect any new houses to be built? He wants to put the price up, and tax the developers by a huge amount. He knows perfectly well that the uniform business rate affects all businesses, not just developers. Imposing such a huge tax just on developers is likely to wipe out the development business altogether.

Don Foster: Will the hon. Gentleman give way?

Geoffrey Clifton-Brown: Once more, for the last time.

Don Foster: The hon. Gentleman has answered the question in his own words. As he himself pointed out, we propose that site value rating, or land value taxation, replace the uniform business rate. That would have huge benefits. It would solve a problem that he has still not said how he would solve, and return to use, for example, properties above shops.

Geoffrey Clifton-Brown: I shall now move on to the Liberal Democrats' policy on the right to buy. Here we have an interesting conundrum. In a speech to a housing conference on 5 March 1996, the Liberal Democrats promised that they approved of the right to buy. In XA Home of Your Own", a policy paper produced in September 1996, they said:
	Xwe would extend the right to buy rules that apply to housing associations to all social housing providers".
	They then seem to have had amnesia, changing their minds entirely. A press release issued on 8 October 2002, quoting the hon. Member for Torbay, stated:
	XLiberal Democrats have recently opposed any extension of the Right to Buy".
	As usual, the Liberal Democrats performed a 180-degree about-turn.
	We think it inequitable that, while council-house tenants have a right to buy, the increasing number of housing association tenants, who have ceased to be secure tenants and become assured tenants, have no such right. We have therefore made a policy announcement that we will extend the right to buy from council to housing association tenants. We estimate, taking into account the 3.5 per cent. who applied during the first year of the right to buy council houses, that as many as 40,000 people might be able, and might wish, to buy their homes.
	Those who buy their homes are given a stake in them, and an interest in what is going on. They gain an interest in keeping their homes in good repair, and, above all, an interest in their communities.

Several hon. Members: rose—

Geoffrey Clifton-Brown: I have got them all rising like sheep now. I think that the hon. Member for The Wrekin (Peter Bradley) was first.

Peter Bradley: The hon. Gentleman may be able to make a case for its not being equitable for housing association tenants to have no right to buy. It may well be that many would apply, and would enjoy the benefits of home ownership; but how would that contribute to increasing the amount of affordable housing available to people in housing need?

Geoffrey Clifton-Brown: The hon. Gentleman should have been more patient, as I was just coming to that. However, I welcome his admission that people enjoy buying their own houses as it gives them a stake in their home and their community.
	Up to 40,000 people may wish to buy their houses, empowering themselves and their families. We estimate that for every two houses that are sold we will be able to build one more house. That means that we will be able to build 20,000 extra affordable units. As the Government are currently building 22,000 affordable units, we would almost double the number of affordable units being built, so it would be a win-win situation. At a time when the Deputy Prime Minister wants to restrict the right to buy, we want to extend it.

Bob Spink: As my hon. Friend is doing so well, does he agree that if the 40,000 people who chose to buy their houses—thereby releasing 20,000 new houses on to the market for people who want social housing—were not allowed to buy their houses, they would never move on and release their houses; they would block them for ever and 20,000 people who wanted houses would be betrayed by the Liberal and Labour party policies?

Geoffrey Clifton-Brown: My hon. Friend has made an important and potent point. Last year, only 3.6 per cent. of the affordable housing stock in London became available for re-letting. The average tenancy in affordable houses is getting longer. That is bound to happen. When house prices and rents increase, of course people want to stay longer in subsidised housing. We estimate that the average tenancy in the affordable housing sector is 20 years, so unless we encourage some release from those 1.5 million houses in the registered housing sector, there will never be any movement. My hon. Friend the Member for Castle Point (Bob Spink) is absolutely right. People on the waiting list at the bottom of the housing ladder will welcome a policy that involves building an extra 20,000 affordable units.

David Drew: I thank the hon. Gentleman, who is my near neighbour, for giving way. I wonder how his proposals would affect parish and town councils. As we share a common boundary, he will realise that under the current planning regime, which is long overdue for change, it is difficult to get communities to allocate new land for social and affordable housing. If we also propose extending the right to buy, can the hon. Gentleman honestly, hand on heart, say that such a proposal would be attractive to those parish and town councils? I do not believe that it will be.

Geoffrey Clifton-Brown: The hon. Gentleman is trying to trap me. I have already said that we propose some rural exemption or rural buy-back policies. We have to do that; he is right about that. He is my near neighbour and represents similar villages. If a village had only half a dozen affordable houses, one had been bought under the right to buy and the average tenancy is 20 years, that would mean that there would be no existing affordable units in a small village. Of course we have to treat those matters sensitively and we shall do so.

Several hon. Members: rose—

Geoffrey Clifton-Brown: I will not give way again as I must conclude.
	The essence of the debate is simple. We have a crisis on our hands. The number of homeless people is rising at a huge rate. If the figures from Crisis are to be believed, there is a hidden figure of 400,000 homeless people—a record number. It is a scandal that there are so many homeless people. It is a scandal that so many people live in bed-and-breakfast accommodation. It is a scandal that we are not building more houses and it is a scandal that the Government are not building more affordable housing. The Government are presiding over one of the worst declines in the housing situation and the Liberals are doing no better. All they want to do is tax everybody and everything that moves.
	The message is simple. The Liberals will tax the people; the Labour party will control the people; the Conservative party will set the people free.

Margaret Moran: At one point this afternoon, most Labour Members could have left the Chamber, as the debate had descended into a fight as to who the official Opposition on this issue are. I was also rendered almost speechless by the outrageous comments made by the hon. Member for Cotswold (Mr. Clifton-Brown). I cannot believe that he can stand at the Dispatch Box, given the Tory legacy of two decades of asset-stripping of our national housing stock, a #19 billion backlog of disrepair, leaving homes empty and council tenants in appalling housing conditions, and the desperate slashing of the housing association development programme. During their two decades in office, funding for council housing was halved, the number of rough sleepers doubled and there were record numbers of homeless people and repossessions. My constituency of Luton was dubbed the capital of repossessions. Only now are families recovering from having their homes repossessed as a result of two desperate Tory decades.
	Week in, week out, in my constituency surgeries I see families who live eight to two bedrooms. They have no prospect of moving elsewhere because homes are being sold. Those sold under the right to buy have not been replaced and capital receipts cannot be used to replace them. I would have thought that Conservative Members would have the decency to apologise to my constituents, to the homeless and prospective homeless, and to families living in overcrowded accommodation up and down the country.

Oona King: Does my hon. Friend agree that it is not just the damage that right to buy has done in the past by allowing affordable homes to be sold off, but the damage that it is doing now? Although the hon. Member for Cotswold (Mr. Clifton-Brown) recognised the need to ensure that right to buy does not continue to damage rural areas, the same must apply to urban areas. For example, in the Ocean estate in Tower Hamlets a #21.5 million project to increase social housing has been swamped by #28.5 million of buy-back costs. It is the economics of the madhouse.

Margaret Moran: I absolutely agree with my hon. Friend. I was about to make precisely the same point.

Geoffrey Clifton-Brown: I am grateful to the hon. Lady for giving way. Houses that are purchased under the right to buy do not disappear. Under our policy they would enable new houses to be built. We should tell that to the people at the bottom of the housing ladder. They would like more affordable houses to be built and that is exactly what our policy would do in the hon. Lady's constituency.

Margaret Moran: I believe that people who are homeless, living in overcrowded housing or in housing need will judge the Opposition on their record and recognise that their legacy has caused misery to thousands. As I will explain, their proposals make no economic sense. In government, they presided over record levels of spending on homelessness and bed and breakfast. Because of their dogma of doing away with affordable social housing, they preferred to put record numbers of families—including children—into bed-and-breakfast accommodation rather than allow social housing to be built or renovated.
	Those of us who have been involved in housing for longer than we care to remember, those of us who started out in the days before XCathy Come Home", recall what homelessness meant then. This Government restored the rights of homeless people, after the Tories removed the safety net of social housing in the face of wholehearted opposition in the dying days of the Tory Government and turned the clock back to the days of XCathy Come Home". The Opposition should remember that legacy and some of the images that will stick in my mind for a long time. There were reports of Tory housing Ministers on their way to the opera stepping over homeless people and a Housing Minister who preferred to drink champagne with Tory sponsors rather than talk to people like us in local government who were trying to deal with the issues on the front line.
	Those are the realities of the Tory decades. We recognise, and we are reversing, the economic madness that was Tory housing policy—a policy that involved escalating personal cost, costs in bed-and-breakfast accommodation, costs to the council tax payer, and the cost to society in general of doing away with social housing. We are reaping that whirlwind, and Opposition Members would do well to remember that. We recognise that thriving communities and decent housing underpin all our other social policies, such as tackling poor health and child poverty, regenerating our urban and other areas, and making sure that we have a proper, sustainable fabric for our families and communities.
	The Liberal Democrats should not get away with things entirely. Their everlasting 1p on income tax is intended to fund health, education, transport and housing, so it is inexplicable how, under that arrangement, they intend to match our threefold increase in spending on affordable housing, our extra investment over the next three years to provide 30,000 affordable houses to rent per annum—including 10,000 homes for key workers—the #5 billion capital receipts released to improve 1.7 million council homes, and the spending on 143,000 private homes in poor condition. I await their answer. Those are just some of the things that this Government have already achieved, and it is worth reminding Opposition Members of them. For my constituents, the fact that mortgage rates are now less than half the level that they reached under the Conservatives is a very important factor. Those rates would not have been sustainable under the fairytale economics of the Liberal Democrats.
	What are the Opposition parties' policies? We have heard something of the Liberal Democrats', but all that we have heard from the Conservatives is that they will extend the right to buy. Of course, that is not a new policy—it is a re-tread, a discredited policy. As a former chief executive of a housing association, I remember that, in the early 1980s—[Interruption.] Yes, I do have to remind the Opposition of their history. Back then, we not so gently pointed out to the Conservatives that there were fundamental problems with such a policy, not least of which was the fact that many associations—including my own—had homes that were fully or partly funded through charitable funds. Their policy constitutes a legal nightmare that would require primary legislation. Untangling which homes, or which parts of which homes, could be sold would create an amazing number of administrative problems.

John Pugh: As I understand it, under the Labour party policy of voluntary transfer, those people who transfer from local authorities to housing associations do retain the right to buy. Is that not correct?

Margaret Moran: That is correct in terms of transfer associations, but I am talking about housing associations that are not stock transfer associations.
	I should point out another small error on the Opposition's part. It is estimated that such a policy would cost more than #1 billion in public subsidy. They have made great play of saying that the funds from such sales would be ploughed back into new social housing, but it is much more likely that they would substitute new investment in social housing and delay building affordable new homes. I see no reason why we should trust the Opposition. They did not plough capital receipts from council house sales back into the building of new, affordable homes, so why we should believe that they would do so now for housing associations is beyond me.

Peter Bradley: Drawing on her experience as a chief executive of a housing association, can my hon. Friend clarify the Opposition's mathematics? If a housing association disposes of a property at up to 70 per cent. discount, and, having relinquished the asset value against which it can borrow, is forced to buy back that same property at full market price, how can it then afford to fund the 50 per cent. of Xlike for like" to which reference was made?

Margaret Moran: That is a telling point which the hon. Member for Cotswold will doubtless be keen to answer. Again, that is the economics of the madhouse.

Geoffrey Clifton-Brown: Will the hon. Lady give way?

Margaret Moran: No, other Members are waiting to speak. The hon. Gentleman will doubtless have an opportunity later.
	To add to the excellent point made by my hon. Friend the Member for The Wrekin (Peter Bradley), I should point out that the Opposition's proposal could seriously undermine the future provision of social housing, as lenders worried about declining assets and equity value. As a result, the cost to housing associations of borrowing on the private market would increase. I am told that some smaller associations might simply be unable to sustain any future borrowings; indeed, their existing loans could be put at risk, perhaps at the expense of those associations altogether. Indeed, as lenders sought to cover the increased risk, there would be an increase in tenants' rents to cover those costs, and a likely increase in housing benefit bills. Who would pay the price? Not just homeless families, who would lose the prospect of a home, but housing association tenants, whose rents could well spiral, and all council tax payers, who would pay for increased homelessness and increased housing benefit bills in their areas. That is the economics of the madhouse.

Geoffrey Clifton-Brown: The hon. Lady is raising lots of hares that are not actually going to run under our policy. She might like to know that we are issuing a consultation document on this subject that will be on our central office website. She is extremely welcome to comment on that document, thus helping to make Conservative party policy work in this area.

Margaret Moran: I notice that the hon. Gentleman has no answers to the specific questions that my hon. Friends and I have raised. He simply does not understand the way in which registered social landlords and housing associations are funded.
	I want to comment on the right to buy and the related issues that we need to address. As we have all pointed out, the need for affordable social housing is great and is increasing, which means that we need to sustain the increased investment resulting from the spending review over a longer period. I ask the Minister to look at the record of the former Secretary of State, my right hon. Friend the Member for Tyneside, North (Mr. Byers), who brought forward more than #100 million of housing corporation-approved development programme funding from 2003–04, so that new houses can be built now, rather than backloading the programme. In view of the current crisis, such action will have a greater impact now, and I ask that the Minister consider that option in his winding-up speech.
	I want to comment on a few of the shorter-term issues that need to be addressed. We need to roll out choice-based lettings swiftly. The pilots seem to be working, and in areas of housing crisis such as my own, we have to make some difficult choices. We need to give tenants some opportunities, so that they can make the distinction between the length of time spent on a waiting list, and the chance to move to other areas, difficult though that is. In the short term, families in areas such as mine who need five-bedroom housing, but who are living in two-bedroom accommodation, are unable to be moved at all because of the way the rules work. It would be far better to prevent those families from breaking up—thereby preventing the attendant social consequences—by being a bit more flexible and allowing them to move to properties that are not necessarily ideal. Those families need to understand the options available to them. That is grown up and difficult, but those are the sort of decisions that we face.
	There are simple, small measures that we could adopt. When we, as owner-occupiers, do not want to move, we build extensions to our houses. Why are local authorities not incentivised to do the same? The opportunity exists to do so. We certainly need to address the issue of empty private sector properties. For every homeless family in Luton, there are seven empty private sector properties. We also need to consider the balance in VAT charges on renovation and new build.

John Hayes: On a point of order, Mr. Deputy Speaker. The hon. Lady has been on her feet now for 16 minutes. This is an Opposition day—albeit a Liberal Democrat one, so I regard it with a certain distaste—so is it not a little unfair of her to hog the Floor? I know that she is just getting to the main thrust of her speech, but would not it be better if she restricted her remarks so that more people can speak?

Mr. Deputy Speaker: I am sure that the hon. Gentleman will appreciate that that is not a point of order for the Chair. Points of order simply take more time out of the debate.

Margaret Moran: I was concluding my remarks. We need to consider the right to buy as a serious issue in areas of housing need. We need to consider more positive alternatives to enable tenants across the spectrum of housing tenures to obtain some form of portable equity that they can transfer, instead of housing stock being lost. That applies to local authority and RSL property, and we might consider including other tenures. It is certainly a proposal that colleagues in the Labour Housing Group—which includes many of my hon. Friends—have worked on for many years.
	We also need to consider how we can amend the right to buy, which need not be through primary legislation, to tackle some of the issues that my hon. Friend the Member for Bethnal Green and Bow (Ms King) mentioned and which are connected with regeneration schemes and the way in which some companies are using the right-to-buy legislation. Perhaps we could fund buy-backs of right-to-buy dwellings demolished in regeneration schemes.
	We also need to target recycling of housing capital receipts in high-demand areas. A number of options that would not require primary legislation could make a significant difference, especially in areas of housing need. I hope that the Minister will have the opportunity to commend some of those measures to the House when he winds up.

Mr. Deputy Speaker: Order. There is not much time left in this debate and many hon. Members are seeking to catch my eye. Unless all contributions are considerably briefer, many of them will be disappointed.

Mike Hancock: I wish to offer the hon. Member for Cotswold (Mr. Clifton-Brown) the opportunity to answer the question about the one-for-two policy that he did not have time to give the House.

Geoffrey Clifton-Brown: It depends entirely on the discount that is given. The hon. Gentleman, too, is welcome to comment on our consultation paper. We look forward to receiving his comments so that the Liberal Democrats can help Conservative policy in this area.

Mike Hancock: It is obvious that the Tories will need all the help that they can get to explain their policy. They will manifestly not be able to introduce a policy that people will take seriously.
	I intervened in the Minister's speech on the definition of affordable housing and what that means today. My hon. Friend the Member for Bath (Mr. Foster) said that he did not want to spend too much time on that point, but in Portsmouth we have a continual debate about the terminology of affordable housing. There is a distortion between the words and the delivery, and in most instances we have little chance of providing truly affordable housing.
	A recent speculative planning application was made for 450 homes, of which 100 would be designated as key worker housing of a type to be defined by the developer. The other 350 houses would be very high priced, and as many as 50 per cent. would probably be bought by people from outside the greater Portsmouth area as second homes, because they would be located on one of the most desirable developable sites outside London. Those 350 houses would do little for the 4,000-plus people on our waiting list, the thousands of people living in multiple-occupation properties or the more than 4,000 people on the transfer list. However, that did not stop one council officer claiming that those 450 houses would represent one year's building for Portsmouth under the quota system. It would be unrealistic to assume that any of the houses would satisfy one single instance of true housing need in the city.
	The development of housing is subject to a series of contradictions.

Adrian Flook: If the Liberal Democrats are so concerned about affordable housing, can the hon. Gentleman explain why Liberal Democrat-controlled Taunton Deane has reduced from 40 per cent. to 30 per cent. the element of affordable housing required of developers of new schemes in Taunton? Housing need in Taunton is as great as it no doubt is in Portsmouth.

Mike Hancock: The hon. Gentleman is better placed than I am to ask the Liberal Democrats in Taunton that question. I suggest that he set up a meeting as soon as possible to confront them on that very issue. I am sure that the House would be interested to hear their response. Whatever that response might be, I am sure that it is one that they could justify to the people they represent as the majority on that council.
	Much has been said about the benefits of housing associations. As someone who was brought up in a council house in Portsmouth and who will be for ever grateful for the opportunity to live in a decent house after moving out of a bomb-damaged property just after the war, I will never listen to an argument that suggests that councils should not build and manage houses. Of course, some councils have got it wrong and it has been necessary to improve the way in which housing has been managed by local authorities, but it was a big mistake to suggest that housing associations were the only option.
	There is now a wide divergence between what is provided by local authorities and by housing associations. The Conservatives stopped funding for the Housing Corporation and suggested that housing associations should borrow their money in the future, but that has pushed up their rents. For example, the average weekly rent last year on a three-bedroom house on an estate managed by Portsmouth city council was #62. The nearest comparison for a housing association property was #78, and that figure is a year older than the council figure. In most cases, people need to be unemployed and on maximum benefit to rent such properties from housing associations.

David Drew: I hope that we will not consider only local authorities and housing associations. Co-operative housing, co-housing and community land trusts all have a role to play, but they have not featured significantly in the debate. All those options should be central to the solution, not pushed to the margins.

Mike Hancock: I agree entirely, and I am delighted that the hon. Gentleman took the opportunity to put that on the record. I hope that the Minister will confirm that the Government are considering all the available options. The transfer of equity, which was mentioned by the hon. Member for Luton, South (Margaret Moran), also needs to be considered. If we are ever to tackle the problem properly, we must be fearless and willing to change things that have so far been set in stone. For example, if the Tories are really so keen on the right to buy, would they consider—if they ever, God forbid, got back into power—the right to buy for tenants of private accommodation? I think not. That is a challenge for the hon. Member for Cotswold. Will they grasp that opportunity? Perhaps it will be in the manifesto. Perhaps the hon. Member for Luton, South and I will offer that suggestion when we respond to the Tories' consultation paper. It is a policy that would be very attractive to people who have paid over the odds for private accommodation for many years and would love—[Interruption.]

Mr. Deputy Speaker: Order. I remind the House that the Chair takes a dim view of mobile phones in the Chamber.

Mike Hancock: For the record, let me clarify that the mobile telephone in question was not mine. However, to save his embarrassment, I shall refrain from mentioning the hon. Gentleman involved.

Geoffrey Clifton-Brown: Will the hon. Gentleman give way?

Mike Hancock: The hon. Gentleman was extremely courteous during his speech, and I would normally give way to him gladly, but I am conscious that other hon. Members want to contribute and that there are barely 20 minutes before the wind-up speeches begin.
	I hope that the Minister will accept that the debate will be welcomed by hon. Members of all parties. Labour Members have contributed significantly, but much more remains to be done. The Government must clearly acknowledge that they do not have all the solutions. They need to look at some of the other options that have been set out.
	Brownfield sites will not be brought back into use simply because someone says, without explaining how, that the process will be pump primed. Developers will not look keenly at affordable housing without a real incentive to do so. Local authorities will not be able to do more about empty houses unless the Government give them the power to do so.
	We can talk endlessly about the obscenity that empty houses represent. I live in a city where the Tories' last-but-one privatisation gave a lot of Ministry of Defence properties to a company called Annington Homes. It is obscene that that company should be deliberately keeping blocks of former Ministry of Defence housing in desirable areas close to the sea front empty, with the aim of selling them off. The company does not want to rent the properties to Ministry personnel but, just a few hundred yards up the road, the Ministry of Defence is building new housing. What is that if not unjoined-up government? Is not it an obscenity for all those people desperately in need of homes?
	This debate was urgently needed. My regret is that the Government did not allow a full day's debate in their own time on the issue, on a substantive motion.

Peter Bradley: I should like to commend Liberal Democrat Members on having given up at least half of their Opposition day to this debate. Precious few have attended, however: if the party attached so much interest to the matter, I would have expected more of them to be here.
	There are certain rights and freedoms that distinguish a civilised society. They include the freedoms from fear, hunger and destitution, and the right to a home. I need no lessons from Conservative Members about the human consequences of inadequate housing. I saw them at first hand when I was a councillor in this very city during the 1980s and 1990s. The Conservatives took the right to buy one or two steps further, and I might add that they were unlawful steps. They sold off council flats as if they were going out of fashion—as indeed they were under the previous Conservative Government—and they cynically spurned opportunities to replenish the stock through the planning system.
	The result was that the growing number of homeless people in the centre of London had no hope of finding housing. There were no transfers for growing families needing larger accommodation. Children's lives were blighted because they were never able to sit quietly and do their homework, or play, or simply grow up.
	There were no transfers for sick and disabled people. I was a councillor for Millbank ward, just a stone's throw from the Palace of Westminster. I knew of people who needed oxygen tanks to allow them to breathe who were trapped on the sixth floor of their block of flats and did not leave their homes for six months. They could not move to empty flats on the ground floor because they were boarded up and for sale.
	No one need tell me about the consequences of the Tories' policy or their record on affordable homes. The lives of individuals and families were blighted. Communities were broken up and dispersed. What made it worse was that that is what they set out to do in Westminster, the Tories' flagship authority. I have yet to hear a word of apology, regret or even acknowledgement from Tory Members.
	There is much to welcome in what the Government have done already. Last Saturday I attended an exhibition of the proposals for the East Ketley millennium village in my constituency to mark the opening of a public consultation by English Partnerships. Six months ago, I complained in Westminster Hall about the role of English Partnerships, whose aim seemed to be not to promote affordable housing but to deprive the local authority of the means of achieving it. That has changed, which is a credit to the Government. The role of English Partnerships has been transformed, and the East Ketley millennium village is an exemplary scheme.
	The scheme is based on public consultation, which first assesses and then addresses what people say they need. That involves providing schools, facilities for community, leisure and recreation and shops. Of the 800 homes that are to be built, 200 will be affordable homes. That compares with the 92 affordable homes that English Partnerships offered in the two years between 1998 and 2000. That is a credit to the Government.
	My constituency is semi-urban and so, by definition, semi-rural. I want to focus this evening on the rural dimension. Opposition Members speak of the decline of the rural as distinct from the urban way of life. Whatever the rural way of life is, its decline has little to do with foxes and much to do with the lack of affordable housing.
	Why have shops and post offices in villages closed? Under the Conservative Government, 450 rural schools closed in 15 years. Why are rural pubs closing? The answer is that the people who used to use those facilities do not live in the villages any more. Twenty years of Tory housing policies sucked the lifeblood out of many rural communities.
	In the countryside, 86 per cent. of people are homeowners, and just 14 per cent. pay rent. That compares with the respective averages in urban Britain of 77 per cent. and 23 per cent. In the early 1990s, the Rural Development Commission estimated that 25 per cent. of people in the countryside lived on the margins of poverty, and that 40 per cent. of them could not afford to own homes. Where are those people now? Some are living, neglected and isolated, in abject rural poverty, next door to the comfortable Conservatives in their country houses. The rest live in towns—the only places where they can find decent housing.
	In the five years to 1990, 91,000 rural homes were sold off under the right to buy and were not replaced. The Opposition Front-Bench spokesman, the hon. Member for Cotswold (Mr. Clifton-Brown), spoke of a crisis of affordable housing in the countryside, but that crisis was created over 20 years by the Tory Government. Tory Members cannot defend their own record, much less feel pride in it.
	In 1990, it was estimated that 80,000 affordable homes were needed in the subsequent six years, and 17,700 were built. Homes that communities needed to renew and sustain themselves were sold to commuters, retirees and people looking for second homes. That forced land and house prices up and the younger generation to move to the towns. It brought homelessness to rural communities.
	The Opposition's response is to oppose any attempt to develop affordable housing on green fields. The hon. Member for Cotswold said a great deal about providing housing where it was needed, but we have yet to hear whether that includes providing houses in villages where people already live and where they want their younger generation to remain.
	The Opposition now want to make that hugely difficult problem infinitely worse with their second initiative, which is the proposal to extend the right to buy to housing associations. I do not know whether the question is unparliamentary, but what sort of idiot could produce that idea? The answer is that it is none other than the shadow Deputy Prime Minister, the right hon. Member for Haltemprice and Howden (David Davis), who is also a challenger for the Opposition leadership.
	The right hon. Member for Haltemprice and Howden wrote a letter to The Times last week, in which he said:
	XUnder our plans, proceeds from right to buy sales would be reinvested to acquire or build new property."
	The right hon. Gentleman said that he wanted to
	Xallow housing associations the first right of refusal to purchase former housing association properties that come on to the market."
	I repeat my earlier point that, if a housing association sells property at a discount of up to 70 per cent. and then buys it back at market price, how will it be able to afford to build anything other than the garden path up which the Opposition want to lead us?

Geoffrey Clifton-Brown: I am grateful to the hon. Gentleman for giving way. He is one of the few Labour Members who represent a semi-rural if not a rural constituency. Under almost any measure, the closure of shops, pubs, garages and post offices has accelerated hugely under this Labour Government. If there are not enough affordable houses in the hon. Gentleman's constituency, why does he not ask his council to consider a large-scale voluntary transfer? My council has used such a transfer and managed to build as many affordable units as it has sold. If there are too few affordable units in the hon. Gentleman's area, he should ask his council why it has not done anything about it.

Peter Bradley: I shall not address all the fallacies in that short intervention, except to say that Telford and Wrekin council has transferred its stock to a housing trust, which is not, incidentally, building new properties. Moreover, there are 180 Labour Members in rural and semi-rural seats, which is rather more than the Conservative party can muster in its entirety.

Matthew Green: Will the hon. Gentleman give way?

Peter Bradley: No, I would like to make progress, because other hon. Members wish to speak.
	On the loss of social infrastructure, I referred earlier to the 450 village schools that were lost under the Conservative Government. The hon. Member for Cotswold may like to know that we have slowed that rate of loss from 30 a year to three. Even the hon. Gentleman's mathematics must lead him to accept that we are making real progress in our attempt to sustain rural communities.

Jim Knight: Will my hon. Friend give way?

Peter Bradley: I should like to make further progress. I want to draw attention to the recent Conservative policy initiative—perhaps rather more attention than the Opposition Front Bench would like. The hon. Member for Cotswold may talk about consulting now, but it is a little late. He should have spoken to the Rural Housing Trust, for example, before he published this ill begotten initiative. Its press release of 11 October begins and ends with an indictment of Conservative policy past and present. It says:
	Xmuch of the current shortage of affordable housing in villages has its roots in the sale of council houses in the 1980s and 1990s. Special safeguards mean that housing association homes built in villages are exempt from the right to buy. It is imperative that Mr. Davis"—
	for it is he—
	Xshould announce immediately that this exemption will continue.
	In rural areas, where land use is becoming a fiercely debated topic, the Trust has been successful in persuading land owners to provide agricultural land for small developments of affordable housing on condition that they will be retained for local people in perpetuity. If land owners believe that houses would change hands at high prices and be sold to outsiders, forcing out people from the village, they will be extremely reluctant to support such projects."
	The press release continues:
	XSimilarly, village communities whose support is vital to a housing development proceeding, would have no confidence in the projects if they do not have the reassurance that the houses will be retained in perpetuity to meet local needs."
	That is the point that my hon. Friend the Member for Stroud (Mr. Drew) made.
	The highly respected chief executive of the Rural Housing Trust, Moira Constable, says in the press release:
	XWe will not miss a single opportunity to point out the folly of introducing this right in the future. We see at first hand the hardships faced by local people priced out of their communities and the benefits that are reaped when they are given the chance to stay. The statement has already caused alarm among landowners from whom we are in the process of acquiring land."
	There is already a blight on the provision of land for affordable housing in the country. Someone should tell landowners in rural England not to panic; there is a very slender chance that a Conservative Government will return, and the eventuality is made even more unlikely by this policy initiative.
	I believe that the Government are on the right track, and so do most organisations that represent rural communities.

Matthew Green: The hon. Gentleman believes that the Government are on the right track. The Deputy Prime Minister's consultation paper would force Bridgnorth district council, which the hon. Gentleman and I share in our constituencies, into carrying out large-scale voluntary transfers, which their members have not, until now, supported.

Gary Streeter: They have already transferred them.

Matthew Green: No, that is the Wrekin. The hon. Gentleman's constituency covers two councils.
	Does the hon. Gentleman support the Deputy Prime Minister's move to force Bridgnorth to make large-scale voluntary transfers?

Peter Bradley: The simple answer is that nobody can be forced to undertake a voluntary transfer: it is voluntary and depends ultimately on the vote of the tenants.
	Let me put down some pointers for my Front Bench. We want more affordable housing in rural communities and the jobs that go with it, because that is the only way to prevent migration to towns. People who live and work in the same community send their children to the village school, do their shopping in the local store, transact their business in the local post office and relax in the local pub. We want more of the same from the Government. We want more Housing Corporation funding. We desperately need more flexibility in the planning system; we want a creative planning system, not one that simply focuses on development control. We want more of the same encouragement to parish councils to build the visions and consensus that will deliver the change we need in the countryside.
	My plea to Ministers is to be bold and to listen to rural organisations and communities, unlike the Conservatives. Such organisations welcome development in the countryside as long as it meets identified need and is of the highest quality. I ask Ministers not to make affordable housing for rural communities dependent solely on planning gain. That will simply introduce yet more executive private housing that nobody wants in a rural community. We do not want crumbs from the table; we want equity for people in rural communities.
	I ask the Government to consider how much the need for all kinds of housing could be met by requiring landlords to open up empty properties. I ask them at last to allow local planning authorities to distinguish between housing tenures and to recognise that housing, particularly in rural communities, must be where it is needed and not just on brownfield sites. I support the Government's impetus in recycling brownfield sites and ensuring that as much development takes place on them as possible. However, I do not want young people from village communities migrating to those brownfield sites because the only way to sustain those rural communities is to build in their villages. Finally, above all, funding for affordable housing needs to be increased.
	I believe that the Government are doing many of the right things, but we need to accelerate the process in town and country alike if we are to ensure that no one in our society is denied the basic right to a home of their own.

Anthony Steen: I want first to apologise to my hon. Friends the Members for South-West Devon (Mr. Streeter) and for Witney (Mr. Cameron). They have waited, just as I have, throughout the debate, and because some of the speeches have been inexcusably long, they will not be called. I think the whole House would have liked to hear what they had to say.
	Although I am delighted that you have called me, Mr. Deputy Speaker, I find it puzzling that of all the Front-Bench and Back-Bench Members who have spoken, no one has mentioned the very simple problem surrounding affordable housing, which is that we need a lot more houses. That is the basic problem. We need more homes for sale on the social and the open market. My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) said in the 1990s that we needed 4.25 million new homes by 2011. The Deputy Prime Minister said that that figure was a bit high and rounded it down to 3.8 million. However, in the past five years, 687,500 new homes have come on to the housing market. I do not understand all these complicated formulae. It is a simple problem: we need many more homes. The Liberal Democrats do not say so because they know that the houses would have to be built on greenfield sites, and they do not want to lose votes. If the Liberal Democrats get in it is because they are populist; they do not want to talk about the reality.
	If housing provision continues at its present level until 2011, the Government will fall short of their housing target by 50 per cent. The Deputy Prime Minister may say that we need 3.8 million houses, but we will get 1.9 million. That is where the problem lies.
	It is pointless building new houses in areas where people do not want to live. In the past, Labour moved industry up to the north-west, to Halewood, and then built massive council housing estates. It did not work. As soon as there is a recession, private enterprise companies first pull out of is the places they have been put by the Government with the help of regional aid.

Jim Knight: Will the hon. Gentleman give way?

Anthony Steen: No, time is too short, and I have a lot to say.
	Most of the pressure for new housing is in London and the south-east. That is why we are tearing down council housing estates in the north-west, in Liverpool, and all over the place. We have to build houses in places where people want to live.

Jim Knight: Will the hon. Gentleman give way? It is on this point.

Anthony Steen: I know that it is on that point, but the hon. Gentleman will have to wait.
	The demographic profile is a big issue. Britain has the highest divorce rate in Europe, which means that we need two homes for every married couple when they split up. More people are living longer, and although we are delighted about that, they are occupying houses. More young people are moving out of the family home early and need accommodation.
	So, we have a demographic and a regional problem. People do not want to live in urban areas; they want to live in the countryside. Therefore, we have a problem with locating land—greenfield sites—where people want to live.
	While I welcome the new Conservative policy—who would not—to give tenants in housing association properties the right to buy, it can only be a long-term strategy.

Andrew Love: Will the hon. Gentleman give way?

Anthony Steen: No, I will not.
	That policy would simply reduce the amount of social housing available to local authorities and registered social landlords. It will work only if it is combined with a massive house-building programme. The state has now based its ability to provide affordable housing on the viability of private developers. It is amazing that the Liberal Democrats have not mentioned the key to the problem—they have mentioned everything else but that. I hope that the hon. Member for Torbay (Mr. Sanders) will refer to it in his reply.
	Section 106 agreements under the Planning and Compensation Act 1991 are the key to affordable housing. I hope that the hon. Gentleman is familiar with those. That section allows planning authorities to grant development permission subject to a set of conditions. Increasingly, section 106 has become the main way for local authorities to force developers to provide affordable homes. I do not know whether hon. Members are familiar with how it works. The local authority planners tell developers that they can develop a site, but that x per cent. of the houses built must be affordable. That is where the problem lies. In London, the suggested figure is 50 per cent. In my constituency of South Hams, the Conservative-controlled council says that it should be 66 per cent.
	The problem is that developers will develop only if they can make a profit. They cannot do so if 50 per cent. or 66 per cent. of the houses must be affordable. That is why when the Minister replies he will probably say that the Government's yardstick is 25 per cent.

Gary Streeter: I am enjoying my hon. Friend's speech. Does he agree that it is not only a question of affordable homes? In many parts of the west country, there is particular demand for affordable homes to buy. We know that 93 per cent. of the population aspire to own their own homes, which is a wonderful thing to do. Does my hon. Friend agree that, while the Government are introducing a number of interesting schemes to meet the required number of affordable homes, their mindset is still stuck on social housing to rent? They need to make a paradigm shift and understand that in many parts of the country the pressure is for affordable homes to buy.

Anthony Steen: I hope that the Minister and the Liberal Democrat Front-Bench spokesman will have heard my hon. Friend's excellent intervention. I am sorry that he did not get the opportunity to speak, as he would have concentrated on that important point.

Jim Knight: Will the hon. Gentleman give way?

Anthony Steen: No, I cannot give way again. I have done so once already.
	New Labour wants new mixed communities—the special mix in the community. I am not against mixed communities, but one must have affordable housing—both houses to let and private housing. The problem is with the percentage. Private developers are not building enough houses and that is why I started by giving the figures. The Government targets are falling short by 50 per cent. because the developer has no financial incentive to build houses as the local authorities are asking for too high a percentage to be low-cost, affordable housing and the developer cannot build those houses and make a profit. They also have to put in all the infrastructure.
	Section 106 is the key to affordable housing. The building of such housing has slowed down because the developer has no incentive to build. It seems clear that the large affordable housing quotas imposed on developers by the section 106 agreements make many developments uneconomical. Developers still have to pay the market rate for the land, as well as for the materials and labour. They are also duty bound to help to provide the local infrastructure, to resource the new developments and to provide financial assistance for flood prevention, which is a new Government requirement.
	Local authorities have forgotten that the provision of housing operates in a market where the usual rules of economics still apply. The result will be twofold. First, developers will not develop—at least, not in the areas where affordable housing quotas are high and housing is badly needed. Secondly, they will simply wait for a policy change, probably at a local level—a reduction in the affordable housing quota. Either way, that will damage our ability to provide any form of housing. It will further deepen the affordability crisis in many areas.
	For section 106 agreements to work, there needs to be a thriving market for developers, where capital is available and the baseline margins are enough to satisfy investors. Squeezing margins by demanding high affordable housing quotas will damage the private developer's ability to operate and will cause an ever-growing problem of scarcity, put up the price of housing and lead to demands for higher wages, ultimately creating an inflationary spiral.
	Those are the issues, and neither the Liberal Democrat nor the Labour Front-Bench spokesmen have dealt with them. The Conservative Front-Bench spokesman had an insight into the problems—not enough houses being built, section 106 agreements and developers not building. Those are the issues.

Adrian Sanders: This has been an interesting and sometimes passionate debate, and it is long overdue. My hon. Friend the Member for Bath (Mr. Foster) opened the debate and laid out the case for action. He highlighted the effect of rising house prices on low-income groups. He argued against centralised housing targets and in favour of more powers for local authorities. He committed me to answering the question of the hon. Member for Cotswold (Mr. Clifton-Brown) about land value taxation, which I shall gladly do.
	The hon. Member for Totnes (Mr. Steen) is absolutely right. The question is one of supply and the lack of supply of affordable housing. The second problem is that money is relatively cheap to borrow and that cheap money is chasing that lack of supply. It is increasing house prices and raising the entry point to home ownership for lots of moderate and lower income families.
	The sale of stock during the 1980s without properly replacing it has exacerbated the existing housing crisis. It is not due to a shortage of land, as some people say, although every hon. Member present will point to a shortage within their constituency. We need a mechanism that will release land—a mechanism that will end speculative windfalls from land that has been kept from the market while the price has risen, that will encourage the most efficient use of space, and that will help to bring empty homes back into use. That mechanism is land value taxation, which is sometimes called site value rating. It is our alternative policy to the uniform business rate. It is not an extra tax but a replacement tax.
	The Minister recognised that housing markets vary dramatically across the country. That is important when considering this issue. There is not a single solution that will solve the crisis in every housing market. She mentioned the circumstances that the Government had inherited, but she did not explain why we had to endure three further years of neglect. Only now are additional sums of money are being found for housing.The Minister rightly said that housing should not be seen in isolation. It is certainly our view that it has to be considered alongside all other regeneration, transport, health, social services and planning policies—the whole gambit of Government policy needs to be brought in when considering housing.
	The lack of supply is causing immense difficulties for many families. Inadequate or inappropriate housing leads to additional social costs. The lack of social housing is of itself a social cost. There is a link between low educational attainment and poor accommodation. It is more likely that a family in poor, overcrowded accommodation will have a greater demand on social or health services. There is a link between crime and poor housing—so the social cost of not having enough social affordable housing is great.
	The hon. Member for Cotswold gave us all the statistics and some of the reasons for the problem. I am surprised that the hon. Member for Totnes was not present for his speech. Perhaps he was watching it on a monitor outside, but I do not remember seeing him here until the very end. [Hon. Members: XHe was here!"] He was not here at the beginning of the debate. [Hon. Members: XWithdraw!"] I will withdraw that accusation if the hon. Gentleman was here for the speech of the hon. Member for Cotswold. He was certainly not here for that of my hon. Friend the Member for Bath, which is probably why he made that attack on the Liberal Democrats, in absentia.
	The hon. Member for Cotswold rightly set out all the statistics and explained why we need to do something to increase the supply of affordable housing. He then tried to explain Conservative policies. He talked about the pump priming of brownfield land, but he did not explain how he would do that, or what would be cut from public expenditure or which taxes would be raised to support the policy. The hon. Gentleman wants more homes above shops, but, again, he did not say how that is to happen. He wants to encourage more private sector investment—again, answer came there none as to how that would be achieved.
	We then heard about the extension of the right to buy. The Liberal Democrat view is simple: we believe in property ownership and we support the aspirations of tenants who want to become owner-occupiers, but we do not support the rundown in social housing stock that has led to so many of the consequences raised by the Minister, by the hon. Member for Cotswold and by my hon. Friend the Member for Bath.

David Cameron: So that we can be clear about Liberal Democrat policy on the right to buy, will the hon. Gentleman explain whether they want to extend it, reduce it or keep it just the same?

Colin Breed: Yes.

Adrian Sanders: My hon. Friend gives a beautiful precis of my answer.
	The hon. Member for Luton, South (Margaret Moran) spoke well and with passion—[Hon. Members: XAnswer the question."] The answer is yes, but it depends entirely on the housing market. We do not want to extend the right to buy council housing by increasing discounts. We want to respect the position of people who already have the right to buy, but where there are acute housing shortages we may need to restrict the discount and even to change the qualifying period—but we do not want to take away the right to buy.

John Pugh: Will my hon. Friend give way?

Adrian Sanders: I will in a moment.
	The hon. Member for Luton, South spoke well and with passion on behalf of those who have paid, and continue to pay, the price for the social housing stock that has never been replaced. My hon. Friend the Member for Portsmouth, South (Mr. Hancock) argued for a level playing field for councils and other housing providers. That point was at the heart of the message of my hon. Friend the Member for Bath—we need a level playing field.
	In response to the hon. Member for Stroud (Mr. Drew), my hon. Friend the Member for Portsmouth, South agreed that we should not rule out any form of housing provision; there is a role for co-ops, for self-build and for community land trusts. The Government must tell us how they plan to encourage alternative forms of housing provision.
	The hon. Member for The Wrekin (Peter Bradley) talked about rural communities and the devastation caused in them by the non-replacement of social housing. That lies at the heart of the problem, which was summed up beautifully by the hon. Member for Totnes, namely, that there is a lack of affordable housing both for purchase and for rent. Unless we tackle that problem, house price rises will continue, the number of people in poor and inadequate accommodation will increase and the number of people in wholly inadequate bed-and-breakfast accommodation will also rise.Let us tackle affordable housing.

Tony McNulty: I welcome this debate. I have had to follow many hard acts during my short time as a Member, but the contribution of the hon. Member for Torbay (Mr. Sanders) was not one of them. There were many useful contributions to the debate. The most interesting speech from the official Opposition—not for the first time—was made by the hon. Member for Totnes (Mr. Steen). His comments were well informed and well couched. I am grateful for them and shall read them with great interest. I may get back to him on a few points. The hon. Gentleman's speech was very different from the Cotswold hysteria or hurricane from the Opposition Front Bench, which did not say much at all.
	The most substantive comments came from the Government Benches—not unusually. My hon. Friend the Member for The Wrekin (Peter Bradley) made some telling points about rural housing. He effectively highlighted the sham of the official Opposition's crocodile tears and their new-found love and affection for the countryside—not least housing in the countryside. He also made some pointed remarks about the urban version of Conservatism: what they did in Westminster, to their shame and disgrace, under the lamentable Shirley Porter.
	My hon. Friend the Member for Bethnal Green and Bow (Ms King) made some interesting comments. I can tell her that we intend to introduce a new housing, health and safety regime when parliamentary time permits. The overcrowding standards to which she referred will indeed be considered in that context.
	My hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh) and for Islington, North (Jeremy Corbyn) made some excellent points about land use. In London in particular, but also elsewhere, land is a factor in the provision of affordable housing. Yes, as the hon. Member for Totnes pointed out, section 106 is important, but land is a precious resource—certainly in our urban areas—and to see some local councils fritter sites away or sell them unnecessarily without getting full social use from them is regrettable. Furthermore, as I have discussed with my hon. Friend the Member for Mitcham and Morden, it is not appropriate for councils to land-bank sites and claim that, for the 20th year, this year might be the right year for industrial use even though the previous 19 years were not. That is why, as and when we get the chance to introduce planning legislation, there will be a sharp focus on local development frameworks.
	My hon. Friend the Member for Luton, South (Margaret Moran) made some excellent points on homelessness and the right to buy. She tried to tempt me down the resources road and to talk about the divvying up of the resources in the comprehensive spending review. I shall not do that. My right hon. Friend the Deputy Prime Minister will deal with that in due course.
	My hon. Friend the Member for Stroud (Mr. Drew) made some useful points, not least about the role of the co-operative and mutual sector in housing.
	I shall refer to the speech of the hon. Member for Bath (Mr. Foster) later. Most of the other comments seemed almost to have been made in a vacuum. Apart from the contribution of the hon. Member for Totnes, nothing of substance was offered or suggested from the official Opposition. Nothing was offered or suggested to show that currently we are doing anything wrong or that there is anything wrong with the policies that are unfolding. As my hon. Friend the Member for Luton, South pointed out, there was certainly no apology for the 500,000 homes repossessed between 1990 and 1997. There was no apology for a regime in which interest rates shot up to 50 per cent. and inflation was more than 22 per cent. at various stages. Imagine if the current difficulties in affordable housing had occurred during the economic disaster of the Conservative Government. As my hon. Friend pointed out, we inherited #19 billion—

Mark Francois: Will the hon. Gentleman give way?

Tony McNulty: I shall because Rayleigh, as opposed to most of these other characters, has been here all the time.

Mark Francois: I thank the Minister for giving way. On a factual point, will he tell us in which year under the Tory Government inflation stood at 22 per cent?

Tony McNulty: You are a historian, you work it out—

Mr. Deputy Speaker: Order. The hon. Gentleman must use correct parliamentary language.

Tony McNulty: The hon. Member for Rayleigh (Mr. Francois) is a Conservative historian and he can work it out, rather than you, Mr. Deputy Speaker—I was not offering that to you at all.
	The only sensible thing that the hon. Member for Torbay said was that the hon. Member for Cotswold (Mr. Clifton-Brown) had said nothing. I waited with bated breath. We heard the usual rendition—the little family internecine dispute between the two Opposition parties. We heard the critique of the Liberals and waited with bated breath for the hon. Gentleman to explore Conservative policies, but we got nothing. Solutions were offered. I wrote them all down. We heard about pump priming of brownfield land. As the hon. Member for Torbay said, nothing was offered apart from a reworking and repetition of the words Xpump", Xpriming", Xbrown", Xfield" and Xland". There was no substance of any description and a complete absence of knowledge of what has happened post the derelict land grant, gap funding and the European regime. The hon. Member for Cotswold should have known about that because he was there when Winchester put up the PPG3 debate last July. That regime has been replaced. Empty homes—I think that he mentioned that problem three times—

Mr. Deputy Speaker: Order. If the hon. Gentleman is going to refer to Members of this House, he should do so correctly.

Tony McNulty: I thought that I had, Mr. Deputy Speaker; I apologise if I did not.
	The hon. Member for Cotswold mentioned empty homes three or four times and offered no suggestions, save for, XEncourage more private sector money." He continued lamely, XIt may well mean legislative changes and we might look at that but we might publish something; we might consult a bit later." That was it—the sole substance of the Opposition's—

Geoffrey Clifton-Brown: Will the hon. Gentleman give way?

Tony McNulty: Of course.

Geoffrey Clifton-Brown: Instead of going into his ungracious usual rant, will the hon. Gentleman now tell us what the Government will do to rectify the current situation? We have the largest number of homeless people in this country ever. When will we get back to building 33,000 affordable social housing units a year, as the Conservatives did in their last year in government, instead of the miserable 22,000 that are currently being built?

Tony McNulty: All that the hon. Gentleman offered was an exposition of some sorts on the right to buy, which showed, rather like—[Interruption.] I think that I have another 10 minutes yet; you will have to wait and see. [Hon. Members: XYou."]
	All that the hon. Gentleman offered us was another extended right to buy. That merely offered us a stark misunderstanding of the regime under which housing associations currently operate. He asked how on earth two could become one. It is possible to sell off two houses and rebuild one under the current criteria. He shows a profound lack of understanding of the current regime and charity law. How on earth will the banks and private financiers say, XThat is okay; you are selling off the assets against which the money that we are lending you, and have loaned you, is secured"? They certainly would not say that.
	We are told by the shadow Deputy Prime Minister—I almost said shadow Leader of the Opposition—that more than 1 million people would be eligible for the new right-to-buy extension. The numbers simply do not stack up, to the extent that we cannot find 1 million people who would be eligible for such an extension; they simply do not exist. I repeat: housing associations raise private money. The level of their borrowing is based on their assets and rental incomes. If we disposed of their assets—sold their houses—they would no longer have that asset stream. If they were forced to sell at large discounts, it could put their existing loans and future borrowings in jeopardy. I should be very interested indeed to see, if the Opposition stick with this scheme, where in their next shadow Budget—should there ever be one—we shall see the #1 billion housing subsidy that even 20,000 homes will require. The scheme is, in short, stark raving bonkers and purely and utterly a device for the next Conservative party leadership contest. That is a matter of profound regret in the context of what should be an extremely serious public policy debate on housing—a problem about which every hon. Member on both sides of the House agrees something must be done. We are unfolding those proposals now.

Geoffrey Clifton-Brown: rose—

Tony McNulty: If the hon. Gentleman wants to get in very quickly, please do.

Geoffrey Clifton-Brown: Perhaps we might have some answers to the previous intervention. When shall we get back to the number of affordable social housing units that were built in the last year of the Conservative Government—33,000 instead of the current miserly 22,000? The Minister is misrepresenting our policy. The assets, of course, will still be there, even once those houses are sold, because new houses will be built.

Tony McNulty: New houses will not be built under the existing financial regime, so the hon. Gentleman or his friends, or the putative next leader of his party, needs to tell us where the public subsidy is coming from and how these new houses will be built under the current Housing Corporation regime. In the context of what he says about social housing, I can tell hon. Members how it will not be built. That number of houses will not be built by extending the right to buy in the way that he suggests. If the Leader of the Opposition is a quiet man, the Conservatives' policies on housing offer only deafening silence. It is shameful that they offer such a gimmick. Our policies are clearly laid out—[Interruption.] I am responding to pitiful debate from the Opposition.
	We then come to the Liberal Democrat motion, which is very interesting in the sense that it does not say a lot. Actually, if stripped bare, it really says: XWe give you half a pat on the back. If we include the word 'regrets', it means that we are opposing you; if we include the words 'urgent action', that means that we are in opposition to the Government." Beyond that, the rest of the motion says, XWe support every single thing that the Government do". That is obtuse, to say the least. If the Liberal Democrats want, as they say, to be entirely honest, now that the motion has been somewhat tidied up by the Government they should drop their motion, accept the amendment in full and then get very serious about it.
	I question in part the Liberal Democrats' seriousness, not least because I decided to have a little look at exactly what previous expositions they had made in terms of housing policy. They have taken great care and pride, at Budget time, to produce their own little books full of facts and figures. Some little person always stands up and says, XIt has all been costed, so these are real policies, which, if we were ever to be the Government, would actually be implemented." I have XInvest to Innovate", the last Liberal Democrat alternative Budget. Where does it mention housing? Where does it mention anything comparable to the comprehensive spending review figures, or the figures that the present Government have spent over the last couple of years? It does not mention anything at all. There is no section on housing. As a number of Opposition Members said, it mentions in passing VAT on development land, and that is it. Naturally, one starts to wonder how serious the Liberal Democrats are.
	The speech two weeks ago by the leader of the Liberal Democrats, whose constituency I cannot remember at the moment, was the defining moment that made the leader of the third party the leader of the effective Opposition, as opposed to the actual Opposition. Did it contain nuggets about housing—how serious a problem housing need was and how serious the provision of affordable housing was as a matter of public policy? There was nothing there, not even a passing mention.
	I assure the House that we are in the business of real solutions—solutions which, by and large, the Liberal Democrats support, so they should be supporting us tonight. If hon. Members want to know what they are, read the speech that the Deputy Prime Minister made on 18 July: not vacuity, not empty-headed gimmicks, but real action and policies.
	We are the Government who attack homelessness. The figures for homelessness have gone up purely and simply because, for the first time in 20 or 30 years, the Government have recognised that what we need to capture is the real amount of homelessness. We have entirely redefined vulnerability. We have redefined the definition to capture as many people as possible—read the priority needs order. Under previous Governments, the statutory framework never took account of women fleeing domestic violence. Under previous priority needs orders, they did not exist in terms of homelessness. Now they do; we recognise them and we recognise that they have a full right to housing when they are fleeing domestic violence. That never existed before under Labour or Conservative Governments.
	We are tackling bed and breakfasts in a way not done at all by other people.

Mike Hancock: Will the hon. Gentleman give way?

Tony McNulty: I will not, if the hon. Gentleman will forgive me; I have just two minutes.
	The Government share the frustration that teachers cannot afford a home of their own, not least in London. The people who teach, treat and police our communities need a home. Public services are vital to every urban area. That is why up to 8,000 more homes for key workers are in the pipeline next year. That is why, however much people knock it, the starter homes initiative and many other things that we are doing are important.
	I was astonished that not many Opposition Members mentioned the positive, productive and imaginative role that the private sector is increasingly playing in securing key worker and affordable housing, and without any public subsidy. That is to its credit. The Government also want people to feel the pride that comes from a home renewed. We are well on the way to achieving a decency home target and are considering moving into other areas beyond the social sector for that.
	We stand, as a Government, for more homes for more people in need, at a price that they can afford, within communities that thrive. There should be real cross-party consensus on that, because we all represent these communities. It annoys me that the people who suddenly want more affordable housing one day are those who want the Government to slash the house building outputs in regional planning guidance and local plans the next day. It annoys me that those who have put their name to the motion—the Liberal Democrats—are the very people who lead the Nimby charge against development when they are in the countryside one day, but want as much affordable housing as possible when they are in urban areas the next day.
	This is a national crisis that needs national responses; it does not need feigned differences between party policies. There is much to unite all three main parties. The Government know that power involves the responsibility to take tough decisions. We have set the agenda very clearly—far more clearly than any Government during the past 20 or 30 years. We are helping the homeless to help themselves. We are providing better housing and shaping stronger communities.
	With the help of all those hon. Members who are serious about solving housing difficulties, overcoming the problems of affordable housing and meeting the needs of key workers, we can achieve a step change for the first time in a generation, so all our cities and urban communities thrive and are sustainable in ways that they have never been before. We have one chance, so I urge all parties to work with us, not against us.

Question put, That the original words stand part of the Question:—
	The House divided: Ayes 50, Noes 447.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
	Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House welcomes the additional funding for housing announced in the Spending Review 2002 and recent measures to tackle homelessness; and supports the action being taken better to link local and regional planning and housing policies, to bring back into use empty properties, to increase the density of housing developments, to encourage local authorities to implement fully PPG3 and to reform the right to buy to prevent abuses of the system while resisting the Conservative Opposition's proposals for its extension.

Nuclear Power

Mr. Deputy Speaker: I must inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

Vincent Cable: I beg to move,
	That this House notes with concern the decision of the Government to put at risk over #600 million of public funds in order to prevent the bankruptcy of the privatised nuclear power company British Energy; further notes that several competitor companies in the deregulated market also face financial collapse and that some are petitioning for Government assistance; believes that nuclear power has been shown in a competitive market to be uneconomic as well as to generate long-term environmental costs in respect of waste disposal and decommissioning; further believes that it would be wrong for the Government to continue to bail out British Energy shareholders with a massive unplanned injection of public money or encourage new nuclear power projects; and calls on Her Majesty's Government urgently to bring forward its response to the PIU energy review, with measures to initiate a sustained long-term improvement in energy efficiency and conservation, and to facilitate the more rapid introduction of a variety of new renewable energy technologies as the favoured electricity generating source in the long-term, taking into account the Government's Kyoto targets and the Prime Minister's support for sustainable energy use at Johannesburg.
	I shall concentrate on the wide-ranging implications of the Government's intervention in the energy market in the closing days of the summer recess. I shall pose several issues. The first is to register alarm that the Government have now put at risk about #650 million of public money in the form of what appears to be—no doubt we will receive clarification—an unsecured loan to a privatised company that is running serious losses.
	The second issue is that slightly over a year after introducing a competitive energy market—NETA—the Government have decided to panic at the first sign that the energy market is doing what it was supposed to achieve: identifying the companies that could no longer compete in an environment of excess capacity.
	My third concern is that in intervening to bail out one company but not others—a variety of projects that have failed, some in the renewable energy/combined heat and power sector—the Government have acted in a discriminatory way that may be illegal, although that remains to be tested. They have prejudged fundamentally important issues about long-term energy strategy.
	I am partly making debating points, but mainly I am posing questions. It is extremely unfortunate that the Government did not make a statement on the issue. Regardless of how people regard nuclear or other forms of energy, they want to find out what is going on.

Bob Spink: The hon. Gentleman talks about the Government panicking. Far be it from me to defend the Government, but the Minister for Energy and Construction is an excellent Minister, and the Government do not appear to me to be panicking at all—in fact, quite the contrary. They realise that if we are to save the planet, we must reduce the amount of CO2, and that we must therefore replace nuclear with nuclear. If we are not brave enough to take that decision to control global warming for the sake of the planet, the Liberals will have a heavy burden to bear. Will the hon. Gentleman address that point?

Vincent Cable: I certainly shall. As the hon. Gentleman well knows, there are different ways of reducing carbon emissions, not least by placing far greater emphasis on energy efficiency, energy conservation and new renewables than the Government have placed on them so far.
	I recognise that we must pose questions as well as make assertions. I acknowledge that the Government face difficult choices—for example, thousands of people working in one generator or another being at risk of losing their livelihood is clearly a serious matter. I recognise, too, that the Government have inherited some serious problems in energy policy, not least the privatised company British Energy.
	It is important to delve into the past to some extent. The circumstances in which British Energy was privatised were scandalous: it was sold at a price that barely covered the construction costs of one of the eight reactors that were sold off. We saw such rip-offs in Russia in the early days of the post-communist era, but it happened here in this country with British Energy. The people who have subsequently run the company have displayed a mixture of stupidity and greed comparable to that seen in some of the other utilities. In 1999, when severe losses were already accumulating, the company decided to pay out #430 million in an extra dividend to its shareholders. Earlier this year, when the company had already recorded very large losses of more than #500 million, the chief executive was awarded a performance bonus. Those who ran British Energy went around the world making acquisitions—for example, in north America—but did not concentrate on the increasing competitive problems within their own industry. That is the company whose shareholders the Government now want to rescue.
	There are other factors to be taken into account—for example, many of the reactors are old. The nuclear power industry has a long and complex history: it started in the 1950s, often inspired by genuine and admirable idealism—people wanted to convert the dangers of nuclear warfare into creating a form of cheap energy that would last indefinitely. Policy was taken forward in the 1960s by Harold Wilson, Tony Benn and others who believed that big science and state planning could drive the nuclear energy sector. Mrs. Thatcher was a great fan—perhaps inspired in part by the fact that it was a form of energy that did not pass through the hands of either Arabs or coal miners. Nuclear power had strong patronage from both sides for a long time, but then came an abundance of reports from the Organisation for Economic Co-Operation and Development and others, including the Brundtland report in the mid-1980s, which shows that not only did the nuclear power sector pose serious environmental problems—waste disposal and so on—but it was not economically competitive. It beggars belief that in introducing an energy market the Government did not anticipate the development that has taken place in the past few months.

Tom Watson: Is the hon. Gentleman suggesting that the Government should allow British Energy to enter bankruptcy? If he is, will he suggest how the 15 per cent. reduction in base load could be replaced overnight?

Vincent Cable: The logic of my argument is clearly that British Energy should, if necessary, go into administration—the process that deals with companies that can no longer trade commercially. I shall explain how I think some of the problems surrounding that could be resolved.

Kevin Hughes: No one could ever accuse me of being a supporter of nuclear power—I have never been—but I recognise that the Government have to have their eye on security of energy supply in this country, and that to maintain that properly they must secure diversity of production, which has to include some element of nuclear power production. Does the hon. Gentleman accept that?

Vincent Cable: I certainly accept that security of supply is an important consideration, but I do not think that that is an issue at the moment—there is vast spare capacity in the industry. Nuclear power may or may not be part of the story—we neither advocate nor oppose it as a matter of principle.

Andrew Lansley: The hon. Gentleman refers to the uneconomic character of the introduction of nuclear power generation, but whether it was economically viable at the outset is not so much the issue today as whether the continuing operation of that nuclear plant is economically viable in relation to the current market for electricity. Does he agree that that is the case, and what is his view on economic viability in terms of the marginal costs of operating British Energy's plant?

Vincent Cable: The current market position is as follows. As the hon. Gentleman knows, there has been a fall of 40 per cent. in the wholesale price of electricity in the past three years. British industry has benefited considerably from that reduction to the extent to which it has been passed on. As a result of competition, monopoly profits in the privatised energy generators have been stripped out to a large extent. That has left the nuclear power industry, especially British Energy, selling at a price 20 per cent. below the price at which it could make a profit. That is how fundamentally uncompetitive the industry has become.
	The question is, in those circumstances and with a lot of excess capacity in the energy industry—estimates vary, but National Grid says that there is 30 per cent. excess capacity, and that figure could well rise if there is a downturn in the economy—why should the Government intervene to assist one company? A series of answers to that question have been given, and I shall work through them.
	The first and probably the most important answer cites nuclear safety. Last Thursday, I asked the Leader of the House about this matter. He is clearly a highly intelligent Minister and he is familiar with the arguments, so he did not simply spurt out his answer, which was that the Government had intervened because they were concerned about the safety issues that might arise if British Energy were to cease production. The right hon. Gentleman is right to put the fundamental issue of safety at the top of the list—we share that starting point. However, it is an odd argument, because there is no reason why the closure of a nuclear plant should present a risk to public safety. One of the reactors—Torness—has already been closed, for technical reasons. Perhaps the Minister can give one, but there is no obvious reason why a company that has been received into administration should present a health and safety risk. The Government have a health and safety system that is designed to protect the public in such circumstances.
	What I think is happening—if it is, it is an alarming development—is that the company is, in effect, blackmailing the Government. The company is saying to the Government, XYou sign the cheques to pay to bail us out; otherwise, we will lock the doors, walk away from our installations and leave you to take the risk of any accidents that occur."

Parmjit Dhanda: The hon. Gentleman might be aware that in the local elections earlier this year the Liberal Democrats gained Barnwood ward in Gloucester, which happens to be the home of British Energy. Does he have a message for that Liberal Democrat ward and the 1,000 or more employees of British Energy it contains?

Vincent Cable: The message that I would send to those employees is the same message as I would send to thousands of people across the country, in wards where there are plants with power generation through gas, coal and nuclear, all of which are faced with the loss of their livelihoods. The issue is why the Government have intervened to help one type of plant but not others.
	The first ground given for intervention was safety. As I suggested, and I use the word reservedly, I think the Government are being blackmailed into supporting the company. That is a dangerous game. The company could well come back to the Government and say, XYou have given us #650 million. That is not enough. We need more. We need #1 billion. We need #2 billion, and unless you provide it, public safety is at risk." That is a very dangerous argument, if the Government have embraced it.
	The second argument that has been advanced relates to the security of supply, which the hon. Member for Doncaster, North (Mr. Hughes) raised a few moments ago. It is right that the Government should be concerned that the lights are not switched off—that we do not have a California-style situation. If that is what the Government are concerned about, it is a reasonable preoccupation. However, nothing could be further from the present position. We have, as I said, roughly 30 per cent. spare capacity, despite conditions of peak demand in winter, in an industry where British Energy is generating about 17 per cent. We have a great deal of capacity in the industry. The equivalent of eight nuclear power stations have already received planning consent. As the Government's energy review demonstrated, with reasonable policies the Government could save about 30 per cent. of nuclear output through energy conservation, so the idea that we face a California-style switch-off is ludicrously far removed from the present circumstances.

George Osborne: The hon. Member for Doncaster, North (Mr. Hughes) said that nuclear power may or may not form part of the future energy supply, according to the Liberal Democrats. Is the hon. Member for Twickenham (Dr. Cable) telling us that he has initiated a debate on nuclear power but that his party has not decided whether nuclear power should form part of the future of energy in this country?

Vincent Cable: I shall deal shortly with the so-called issue of keeping the nuclear option open. I have one point to make before I come to that.
	The third issue is the Government's concern that if the company goes bust, they will have dumped on them about #5 billion of decommissioning liabilities that at present, technically and legally, are the responsibility of the shareholders. I understand why the Treasury would be concerned about that, but we are grateful to Greenpeace, among others, which has done some delving into the exact accounting position in respect of decommissioning liabilities. Greenpeace made the point, which many people overlooked at the first run, that those massive sums are not discounted to present value. They represent commitments stretching decades into the future. If the Government were concerned about provision for decommissioning, that could be met by an annual payment of #40 million.

Kevin Hughes: rose—

Paddy Tipping: rose—

Vincent Cable: I will give way, but I was hoping to deal with the question from the hon. Member for Tatton (Mr. Osborne) about where we see nuclear power in the picture.
	The fourth argument that is advanced, which comes to the heart of the debate, is that we must at the very least keep the nuclear option open. The problem is that there are different ways of doing that. It is quite possible that, in years to come, nuclear power technology will have advanced to a point at which it has dealt with the environmental problems that concern us and it is cost-competitive. That is why my colleagues and I believe that it would be prudent and right for the Government to invest in research in nuclear power. That would be a profitable, useful role for the Department of Trade and Industry. That is quite a different matter from a large-scale bail-out of one particular company that cannot compete at this stage.

Paddy Tipping: The hon. Gentleman is right to say that there is over-capacity in the industry, but he is wrong when he says that it is 30 per cent. at the peak in winter. The figure is probably 17 per cent. His party relies on renewables to make up any gap, but of course renewables are not effective in the winter. There needs to be a reserve power. Is he saying that his party does not support nuclear today, but will support nuclear in the future? That seemed to be the way that he was arguing.

Vincent Cable: I said that we should invest in nuclear research, and we would do so with an open mind. [Interruption.] Let me deal with the hon. Gentleman's question. He made a perfectly good intervention, and I shall take it seriously and deal with it. He disparages renewable energy, but the Minister of State, Foreign Office used a wonderful phrase last week in a speech on energy security. He spoke about the need for a portfolio of renewable energies—a variety, not one or a particular one, but a mixture of biomass, wind, wave and so on. All sorts of artificial obstructions, such as planning consents, are being put in the way of wind development. Biomass has developed, but has shut down in this competitive market. The Government are not proposing to bail that out. They are proposing to bail out nuclear power.

Tom Watson: The National Grid believes that overcapacity of 20 per cent. is sufficient to ensure security of supply in times of peak demand. Should British Energy go under, the estimate is that the capacity would be only 8 per cent. over average. Will the hon. Gentleman answer my original question about where the additional capacity would be generated from?

Vincent Cable: There is clearly a debate about the right numbers. The figure that the National Grid supplied to the Government was 30 per cent. It may not be right, and the Minister may come up with different numbers. Of that total, about 6 per cent. has been mothballed, although it can be re-opened at any time.

Crispin Blunt: It is important that we try to establish what Liberal party policy is. I am indebted to federal policy consultation paper No. 61, which states:
	XCurrent party policy calls for nuclear power to be phased out as the current stations come to the end of their lives".
	The hon. Gentleman has just told the House that he and his hon. Friends have a quite different policy. Perhaps he can help us.

Vincent Cable: The hon. Gentleman is either not concentrating or not terribly bright. Any sensible, open-minded energy policy must research its options. The document stated that we supported the phasing out of nuclear power at the end of its life, and I entirely endorse that. I should be interested to hear what public expenditure commitments the Conservatives are prepared to make. The present crisis in the industry has foreshortened the period over which the phase-out will occur.

Several hon. Members: rose—

Vincent Cable: Let me press on. I have taken a fair number of interventions. I shall take one more from the Government Benches, but then I shall move on.

David Drew: I thank the hon. Gentleman for giving way. Does he envisage that the phasing out of nuclear energy would include the interconnector? One of the problems for the German Government and the politicians of some parties in the UK seems to be the willingness to use foreign nuclear sources, while getting rid of national nuclear. Is that not hypocritical as an energy policy?

Vincent Cable: I was not proposing to get rid of the interconnector. If French taxpayers are so foolish as to subsidise British consumers, I am not sure that we should look a gift horse in the mouth.

Several hon. Members: rose—

Vincent Cable: Let me move on to the future.

Several hon. Members: rose—

Madam Deputy Speaker: Order. The hon. Gentleman is clearly not giving way.

Vincent Cable: I have tried to deal with the arguments that I think are being advanced for the Government intervention. I shall move on to the future and consider the Government's intentions.
	The first question that we need to ask is how the Government will get their #650 million back. That is an important question, because we know that the budget is not as comfortable as it was six months or a year ago. How is the money to be retrieved? As far as I understand it, the loan is not secured. It was made to a company that was losing money in the previous financial year at a rate of #500 million a year. The energy market is not improving, so how will the money be generated? Another #1 billion-worth of creditors have secured their loans. Where will the money go? I have a very strong suspicion that it will simply be lost.
	The Government have aired in public a series of options for retrieving the situation. The approach will involve one of two things. Either they will scrap the energy market that they have created, do a complete volte face in respect of the whole principle of competition in energy supply and go back to the days of direction and quotas, or the companies will find money through a different route—in other words, a hidden subsidy rather than an overt one.
	I believe that two mechanisms are being seriously negotiated in Government. The first is exemption of the nuclear power industry from the climate change levy. At first sight, that seems perfectly sensible. After all, the nuclear power industry does not produce any carbon dioxide, so why should it pay a climate change levy? If the Government had listened to our advice and established a proper carbon tax that was charged upstream on gas, coal and oil, the problem would never have arisen. However, what they call a climate change levy is not such a levy at all; it is an energy tax that is arbitrarily applied to a set of industries. If they now exempt the nuclear power industry while applying the measure to other suppliers despite the fact that nuclear energy generates its own environmental problems, they will create severe problems in ensuring a level playing field in the market that they have created. The possibility of such an approach also raises the question of where the money to pay for the exemption should come from. The Chancellor said clearly that the funds need to be offset against employers' national insurance, so any rebating will have to be found through that mechanism, which will impose a charge on the rest of British industry.

Michael Weir: Does the hon. Gentleman not accept that the climate change levy argument is a bit of a red herring? Should British Energy finally go under, the inherent cost of dealing with nuclear waste would offset any savings made by the non-emission of carbon.

Vincent Cable: That is absolutely right and it is one very good reason why any attempt to introduce such exemption from the levy would not be plausible. Of course, the sums involved are also much smaller than the losses that are being incurred, so the problem would not be solved.
	The second mechanism—the one that I think the Government are taking seriously—relates to a technically complicated area. We must closely watch what the Government are doing. They are discussing offloading British Energy's obligation to reprocess waste through Sellafield and BNFL. There is a perfectly good environmental reason for questioning that process. I do not know whether any hon. Members representing the Sellafield region are present, but there are all sorts of worries about Sellafield and sea pollution. I can understand the environmental factors that are involved, but using such issues as a financial mechanism will simply shift the losses upfront from British Energy shareholders and on to the taxpayer through a publicly owned entity. It is a subsidy by the back door.

Geoffrey Robinson: I think that the hon. Gentleman is trying to make the point that the switch from the pool system to the new trading arrangements has imposed a heavy burden on nuclear energy. I am sure that I can carry him in that assessment. However, the point is surely that vertically integrated operators, such as EDF—Electricite de France—have been able to buy downstream retail operations and transfer the burden in that way.

Vincent Cable: rose—

Geoffrey Robinson: If the hon. Gentleman will wait one second, I shall finish the point. Of course, BNFL and others have not been able to do the same thing. All that he is doing is trying to transfer a solution from one area to another, but the simple fact is that we need a balanced—

Madam Deputy Speaker: Order. The hon. Gentleman's contribution is rather long for an intervention. Perhaps he could draw his remarks to a close.

Geoffrey Robinson: We need a balanced arrangement for the pricing of energy throughout the country.

Vincent Cable: The fact is that the people who run British Energy had the option of buying into the downstream. They considered it and walked away. They made a very bad commercial misjudgment and the Government are now expecting taxpayers to pay the bill for the error.

David Chaytor: Does the hon. Gentleman accept that even if British Energy had acquired an electricity retail business, that would not have disguised the essential point, which is that the generation of nuclear power is intrinsically uneconomic and will always remain so?

Vincent Cable: The hon. Gentleman makes the point with considerable eloquence and I thank him for doing so.
	In conclusion, the Government are risking very large amounts of public money to support a failed enterprise in the nuclear power industry for very questionable long-term reasons. If they have large amounts of public money available for that purpose—I did not think that they had—there are other ways in which it could almost certainly be used more cost-effectively. For example, they could support energy conservation. There are probably Labour Members present who, like me, were members of the Committee that scrutinised the Home Energy Conservation Bill before it was sunk because the Treasury was not willing to give the relatively small support that was required. If the money is available, the Government could provide pump priming support for renewables.
	I hope that I have posed a series of questions to Ministers. I think that they are legitimate questions about where their intervention is leading. I hope that the Minister can answer them, but I fear that the Government are creating a subsidy on a scale that will eventually make the millennium dome look like a very small leakage indeed.

Brian Wilson: I beg to move, To leave out from XHouse" to the end of the Question, and to add instead thereof:
	Xwelcomes the publication earlier this year of the Performance and Innovation Unit's review of the strategic issues surrounding energy policy for Great Britain up to 2050; welcomes the Government's commitment to publish an Energy White Paper in the New Year setting out a long-term framework for energy policy following its recent extensive and innovative public consultation on energy issues; understands that British Energy's problems, and those of certain other players, are about companies rather than a way of generating electricity and welcomes the speed with which the market can respond to protect the interests of consumers; recognizes that the future of nuclear power in the UK is a question that has to be addressed on its own merits, not in the light of a particular set of circumstances surrounding a particular private sector company; further recognizes that it is not the responsibility of Government to bail out electricity suppliers unless it threatens safety or security of electricity supplies; and welcomes the work Government has done to promote sustainable energy use in terms of energy use reductions and to promote the development of renewable energy."
	What we heard from the hon. Member for Twickenham (Dr. Cable) was mainly a restatement of anti-nuclear arguments dressed up in a slightly different context. The thrust of his argument is that the Government have acted wrongly in relation to British Energy by giving the loan. After he had said that, I sensed some confusion in his argument. I believe that the Government have acted absolutely properly in relation to British Energy because we are motivated by two overriding imperatives: the absolutely safe operation of nuclear power stations and the maintenance of security of supply. According to those criteria, what the Government have done is both proper and absolutely necessary.

Gregory Barker: Will the Minister give way?

Brian Wilson: I shall do so shortly.
	I understand that the Liberal Democrats have a big problem on energy policy. They are against lots of things, including nuclear power, and if all those things were withdrawn from our energy mix, the lights would go out and carbon emissions would rise. Therefore, they must also purport to be in favour of things, however hypothetically, to resolve their dilemma. What could be cleaner and cuddlier for them to support than renewables? As we have again heard, they want to outbid the rest of us on renewable targets.
	The problem is that the Liberal Democrats did not reach their current mighty heights by being in favour of things. They got there largely by jumping on every opportunistic local bandwagon that happened to be passing. Notoriously, from my point of view, local bandwagons tend to be against renewable energy schemes rather than in favour of them. That is why, in the real world, two thirds of proposed renewable energy developments never happen and why one leading figure in the wind power industry recently said that three issues were obstructing the growth of renewables—planning, planning and planning.

Malcolm Bruce: Will the Minister give way?

Brian Wilson: No; I shall first give the hon. Gentleman something more to feed on.
	So what are the Liberal Democrats doing, as opposed to saying? Let us remember that they are saying that we must abandon existing sources of energy, drive nuclear companies into bankruptcy and replace them with renewables targets far more ambitious than the wimpish ones that we are striving to achieve.
	Let us go on a little tour of Liberal Democrat Britain, beginning with the Solway Firth, one of the best areas in the country for developing offshore wind. Only a couple of weeks ago, the rainbow coalition of Dumfries and Galloway turned down the Robin Rigg project, with the Liberal Democrat chairman of the environment committee—yes, folks, the environment committee—leading the opposition. A few years ago in Langholm, it took a public inquiry to overcome Liberal Democrat opposition to a five-turbine wind farm.
	Let us travel north to Skye, where the leader of the Liberal Democrats is also the local Member of Parliament. One might have thought that that provided an opportunity to show leadership in the movement to triple or quadruple our renewables targets. However, wind farm proposals in Skye have inevitably met with noisy, albeit minority, resistance. The website of the group that opposes wind farms on Skye includes a letter from the leader of the Liberal Democrats. He does not support the opposition, but comes as close as possible to requesting that the application be called in. He writes, XAny proposal will require at the very least the approval of the Highland council and will be closely scrutinised at every stage. I would imagine a proposal of this scale may require the approval of the Scottish Executive. I will certainly be monitoring developments closely." With such leadership, how can the renewables revolution fail?

Malcolm Bruce: Will the Minister explain whether he is in favour of the new electricity trading arrangements that the Government set up? If so, and if that drives electricity down to the extent of making nuclear power stations uneconomic, do the Government believe that they should ignore the market and intervene? If that is the case, what sort of broad energy strategy do they have? Would not it be helpful to tell us when and why they will next intervene in the market?

Brian Wilson: A detached observer might believe that the hon. Gentleman was trying to change the subject from Liberal Democrats' actions as opposed to their theory.
	Let us go to Hereford. At Prime Minister's questions last week, the hon. Member for Hereford (Mr. Keetch) famously called for a public inquiry into a wind farm that has not even been proposed. That is spectacular.
	I often take hon. Members north to Lewis in the Western Isles, but tonight I want to take them down south to Lewes in Sussex, home to a one-man Liberal Democrat wind machine, and a Liberal Democrat-controlled council. Again, we look for leadership and, in that instance, we find it, albeit in unexpected form. The Liberal Democrats have banned solar power because it does not look nice. That is extraordinary but true. They have ordered Lady Wedgwood, a public-spirited individual as far as I can tell, to remove her solar panels because they do not suit the ambience of the area. Moreover, they have introduced a blanket ban on other solar panels in that part of Lewes because it is a conservation area. We now face a new Liberal Democrat pressure group: not NIMBYs but NIMCAs—not in my conservation area.

Robert Smith: Will the Minister give way?

Brian Wilson: No. If the hon. Member for Lewes (Norman Baker) were here, I would give way to him. I believe that Lady Wedgwood speaks for the nation when she writes, XI am very concerned about saving the environment. It is something everyone should be interested in, especially considering what has happened in Lewes with the flooding. I think the whole thing is ridiculous." So do I.

Mark Francois: I have very much enjoyed the Minister's tour de force, but I ask him not to omit Wales. The Liberal Democrats often make great play of renewable energy except in the Welsh Assembly, where they consistently oppose applications for wind farms.

Brian Wilson: I am grateful to the hon. Gentleman. Doubtless the tour could be extended ad infinitum. I welcome further contributions. However, I am making a serious point. There is no point in standing up in the Chamber and saying that we should get rid of nuclear power, oil, coal and so on without being prepared to will the means for an alternative. Time and again, local pressure groups, often with support from the precise people who declare most loudly that they favour renewables in principle, vote against them and block projects so that two thirds are never realised. Then they have the cheek to come here and say that our targets are not sufficiently ambitious.

Simon Thomas: The Minister is making a good cut-out-and-keep speech, which will certainly be in my back pocket the next time the Liberals come round in Ceredigion. He knows that the Liberals opposed the Cefn Croes application, which was for the largest wind farm in both England and Wales. He approved it, though not in the democratic way that I would have liked. Nevertheless, the application was approved with my support and against the opposition of Liberal Democrats in Ceredigion.
	Will the Minister move on to deal with the serious point at the heart of the debate? He must explain the justification for the #650 million British Energy subsidy, how the money will be returned to the Government and whether further demands from British Energy—

Madam Deputy Speaker: Order. The hon. Gentleman's intervention is too long.

Brian Wilson: I am unlikely to forget Cefn Croes because the Bishop of Hereford, no less—I do not know whether he is a Liberal Democrat—

Robert Key: Yes, he is.

Brian Wilson: He compared me with the Taliban destroying the statues.

Roger Williams: The Minister appears to be saying that there should be a fundamental review of the planning system. [Interruption.] We should have a system whereby we can identify suitable places for renewable energy—[Interruption.]

Madam Deputy Speaker: Order.

Roger Williams: We should have such a system rather than speculative applications that are based simply on profit and do not pay due attention to the application's environmental aspects.

Brian Wilson: I agree with the hon. Gentleman. We must work together to find ways in which to overcome Liberal Democrat opportunism.
	I dispute the view of the hon. Member for Ceredigion (Mr. Thomas) that I am not making a serious point. It is immensely serious. I am drawing attention to the contrast between words and actions. Liberal Democrats' words on other subjects such as nuclear power are meaningless if they are not matched by actions that give them at least a hypothetical basis of rationality.

Gregory Barker: I want to lead the Minister to the serious point, namely the #650 million bail-out of British Energy. I presume that the money met the Government's famous best value criteria. At what colossal subsidy will it become uneconomic to bail it out—#800 million, #1 billion, #2 billion? What price will he not pay to keep British Energy afloat?

Brian Wilson: What we put in place lasts until 29 November. Before then, we must decide how to take matters forward after all the discussions that are taking place with the company. However, to characterise our actions as bailing out British Energy is inaccurate. First, the money is a loan [Laughter.] That is an important point. The bond gives us priority over bondholders or shareholders if the company becomes insolvent. However, we are motivated not by bailing out British Energy as a company, but by the safe operation of nuclear power stations and by maintaining security of supply. In spite of the rubbish that we heard earlier, we need nuclear power. Whether we should do so or not is an historic argument, but the idea that any political party in the House could blithely say XLet British Energy go to the wall" is preposterous.

Several hon. Members: rose—

Brian Wilson: I give way to my hon. Friend the Member for Linlithgow (Mr. Dalyell).

Tam Dalyell: Does my hon. Friend agree with the British Energy brief, which states:
	XClosing stations early would bring forward decommissioning costs and transfer #5bn of liabilities to the taxpayer."?
	Is British Energy right to say that?

Brian Wilson: I am sorry. I lost the earlier part of my hon. Friend's intervention in the hubbub.

Tam Dalyell: The British Energy brief makes the important statement that:
	XClosing stations early would bring forward decommissioning costs and transfer #5bn of liabilities to the taxpayer."
	I am asking the Minister—I do not know the answer to this question—whether British Energy is right in making that important statement.

Brian Wilson: I am not going to give my hon. Friend a definitive answer to that. What I will say, however, will put into perspective some of the points that have been made. I have no doubt that it would cost more to close nuclear power stations than it costs to keep them going, and, in keeping them going, we also have that 25 per cent. of the nation's electricity that we need to keep the lights on.

David Chaytor: If we are now moving from the knockabout section of the debate to the serious section, may I ask the Minister about his reference to the 30 per cent. of renewables applications that are turned down? Is it not the case that that figure applies only to onshore wind farm applications, which form only a small part of the whole gamut of renewable energy technologies?

Brian Wilson: It was not one third, but two thirds of the projects approved under the non-fossil fuel obligation that never came to fruition. By definition, most of them were for onshore wind farms. Now that offshore wind farms are coming forward, we are, of course, beginning to hear objections to them. I quoted the example of the Solway Firth site. The only reason that people were in favour of them before was that no one was suggesting them. As soon as sites were suggested, all sorts of interest groups came out of the woodwork—some of them perfectly legitimate, such as civil aviation, Ministry of Defence interests and other maritime users. It is not true that the conditions exist along most of the coastline for offshore wind farms. Furthermore, it is not true that the applications will automatically have an easy ride.
	I believe that wind farms have a huge contribution to make, but they are still at the developmental stage, and their technology is not yet fully commercial. As my hon. Friend the Member for Bury, North (Mr. Chaytor) probably noticed, we have approved two grants of #10 million each over the past two weeks, for the North Hoyle development and for Scroby Sands. I hope that those two examples are the first of many. Okay, most of these are wind projects at present, but that is not because of any preference. It is because, although the other kinds of project have been around for a long time, it is very hard to get them up to a level at which they can be commercially viable.

Alex Salmond: Is it not the case that one of the biggest objectors to wind farms—even bigger than the Liberal Democrats—is the Ministry of Defence? Might not a partial solution be for the Minister to have a word with some of his MOD ministerial colleagues and ask them to stop objecting?

Brian Wilson: I have done, but not in that spirit, because I recognise legitimate interests. Often, when the MOD is blamed for making objections, they turn out not to be from the MOD at all, but from aviation interests in general and civil aviation interests in particular. There is a concern about the impact of wind farms on radar, for example. There are, therefore, perfectly reasonable grounds for concern. I am trying to get a much more stated position from the MOD, so that people know when they are likely to run into objections, but the Ministry is actually co-operating with a large number of developers to give them the advice and guidance that they need. It is worth pointing out that, of the first tranche of 18 offshore wind farm sites to be cleared by the Crown Estate, the MOD objected to or raised concerns about only two. It is not, therefore, true to say that the MOD is making blanket objections.

Andrew Lansley: rose—

David Drew: rose—

Brian Wilson: I shall give way to my hon. Friend the Member for Stroud (Mr. Drew).

David Drew: I thank my hon. Friend; he has been generous with his time. I believe that he will get total support from the whole House—particularly from Labour Members—for the drive towards more renewables, but we must also look beyond renewables to the hydrogen economy. One of the problems involved in trying to shut down the nuclear industry is that, if we lose the knowledge and expertise that it contains, where will the hydrogen economy come from, if not from that source? Perhaps my hon. Friend could tell us that.

Brian Wilson: My hon. Friend makes an excellent point. I keep saying that we have now moved into an era in which the world should not be divided into pro and anti-nuclear fan clubs. We are not fighting the arguments of the 1960s or the 1970s, when the decisions were taken that led to the existence of the nuclear industry. The point is that we have a nuclear industry, and it supplies us with 25 per cent. of our electricity. In Scotland, it supplies us with much more.
	The rational, intelligent argument in which we must engage is whether it makes any kind of sense to run down an industry that is the major low-carbon contributor to the energy mix, just when we face an enormous challenge to reduce the carbon content of our energy supply in general. That is the nub of the debate, and it is perfectly possible to talk about it sensibly.

Patrick Hall: Surely we do not need to talk about running down the nuclear industry. We must look at the next 20 years, during which the existing nuclear power stations will reach the end of their safe lives. Has not the performance and innovation unit suggested in a recent report that that period could present an opportunity for renewables and other sustainable means of electricity production to bridge the gap, meeting the need for a secure supply while reducing some of the public costs and liability involved in the decommissioning of nuclear power?

Brian Wilson: That is roughly what the PIU report said, and I think that there is a strong element of truth in it. In five years, we will know much more about what renewables will actually, rather than potentially, deliver. We will know much more about the potential of offshore wind, biomass, wave power and all the technologies that are being developed. It is a difficult balance, however. If the formula that we should keep the door open to nuclear power is simply repeated as a mantra rather than being backed up by action, at some point it will become a formula for closing the door. As was said by my hon. Friend the Member for Stroud (Mr. Drew), the skills base will be lost, and a long planning run-in is needed for the building of new stations.

George Osborne: Will the hon. Gentleman give way?

Brian Wilson: I will give way once more. I am trying to be helpful.

George Osborne: One of those skill bases is in my constituency, where NNC, which built virtually every nuclear power station in Britain, employs 1,000 people. The Minister says that to keep the door open we need to start planning new nuclear power stations. Is that what the Government are saying in this debate?

Brian Wilson: I think that I have said what I had to say on that. [Laughter.] I am not sure of the reason for the hilarity. Perhaps I have missed something.

George Osborne: I merely wanted to know whether keeping the door open to nuclear power meant starting to plan to build new nuclear power stations. Are the Government in favour of that?

Brian Wilson: I am even more puzzled about what the laughter was about. I have just recognised that what the hon. Gentleman has raised is an issue. Lines must be drawn; a form of words about keeping the door open means nothing. Those are weasel words unless something is done at some point to give them substance. Because of the long run-in, the decision must be made sooner rather than later.

Andrew Lansley: Will the Minister give way?

Brian Wilson: I want to wind up my speech, because I know that others on both sides of the House want to speak, but I will give way once more.

Andrew Lansley: I do not wish to interrupt the Minister too much, but there seems to be a confusion that I think he could help to clear up. The hon. Member for Twickenham (Dr. Cable) pushed the idea that running the current British Energy nuclear plant was uneconomic. Will the Minister confirm that essentially, as British Energy told the Trade and Industry Committee earlier this year, it aims to get its costs down to 1.6p per kWh? That is below the current price curve under the new electricity trading arrangements. It is clearly economically viable to continue to run the plant; the question in relation to British Energy is how to deal in the longer term with the decommissioning costs.

Brian Wilson: That is a fair point. The problems of British Energy are complex—[Laughter.] This is weird.
	The central point about NETA and the price of electricity is that no form of generator can indefinitely produce electricity at a price higher than what the market is paying. In fact, it does not matter what the commodity is; the principle still applies.
	In the context of this debate, what I find puzzling is why the Liberal Democrats or anyone else should say that that argument is the death knell for nuclear power. By the same token, it would be the death knell for renewables. We recognise that, and the whole House agrees. The renewables obligation is a mechanism enabling renewables to be freed, for excellent reasons, from precisely that trap.
	In conclusion, all the issues have to be brought together in the White Paper. Essentially, there are three imperatives of energy policy. First, we must deliver the security of supply that our people are entitled to expect; secondly, we must meet our post-Kyoto environmental targets and obligations; and thirdly, we must deliver affordable energy to households and to industry. This debate and others clearly demonstrate that reconciling those three objectives may be difficult, but it is a central challenge of policy making in the UK.
	In many ways, competitive markets are working. In 1998, we passed legislation to create a competitive and liberalised electricity industry that has improved the way in which the electricity and gas industries operate and are regulated in the UK and the early creation of a truly competitive single European energy market remains our priority. It is worth noting that in the competitive market some 900,000 accounts a month are being switched. That is a remarkable degree of churn.

Chris Mole: Does my hon. Friend welcome the acquisition of TXU(UK) and its associated businesses by Eon-Powergen because , subject to further competition considerations, that will provide some reassurance of supply for consumers and, in the short term at least, of employment for 1,900 TXU employees, many of whom live in my constituency?

Brian Wilson: My hon. Friend will understand my difficulty in simply welcoming the takeover, but I note it with interest and I well understand his point. On my previous point about switching accounts, one of the questions that I raised with Eon-Powergen yesterday was specifically about the XStay Warm" scheme, which applies to pensioners. I would not like to think that there was any concern about the impact of a takeover of TXU on that scheme. I was given the assurance that certainly the existing contracts will be honoured. That is an important message.
	The competitive market is working well in many ways. It is true that competition has brought benefits, but it is also true that reductions in the retail cost of electricity, particularly to domestic consumers, in no way reflect the 40 per cent. drop in the wholesale price of electricity over the past 18 months. I believe that if the liberalised market is to have credibility, it must be clear that consumers are benefiting.
	I welcome the debate. There is much to be discussed before the White Paper and I genuinely look forward to contributions from hon. Members from all parties as there is a lot of valuable input to be made.

Tim Yeo: I am delighted that we have this chance to debate nuclear policy and related issues, and I congratulate the Liberal Democrats on choosing it for the second half of their Supply day, although after hearing the Minister's entertaining tour of Liberal Democrat seats and councils where proposals for renewable energy schemes have been turned down, I wonder whether the Liberals may now slightly regret their choice of subject, in view of the fascinating insights into the way in which their policy on energy, particularly renewables, is working out in practice.
	I welcome the Minister to the Dispatch Box and I congratulate him on an entertaining speech. It was not as informative as some of us had hoped, but I shall come back to that in a moment. I regret the fact that the Government did not consider that a statement on this subject was necessary last week, given the fact that during the recess #650 million of taxpayer's money was committed to supporting British Energy. It is a matter of widespread concern not only that no such statement was made, but that the Secretary of State chose not to attend tonight's debate on an important and urgent subject. I hope that the Minister will pass on that concern.
	Conservative Members take these issues seriously. That is why I have chosen to speak at the first available opportunity that the House has had to debate the subject since I took on the DTI portfolio at the end of July. The fact that the Secretary of State is not here and the delay in deciding what to do about British Energy suggests uncertainty at least, or perhaps some confusion, about the crisis and how to resolve it—perhaps about energy policy generally, but certainly about nuclear policy in particular. It may be that it is more than confusion. Perhaps the reason for the delay is a conflict between Ministers. The hon. Member for Cunninghame, North (Mr. Wilson) is known as someone who supports the nuclear industry, but his view does not seem to be universally shared by his ministerial colleagues. It is hard to avoid the conclusion that either the Government do not really know what to do, or that they do know, but are afraid to do it. Whichever of those explanations is true, the outcome is bad for the industry, bad for consumers and bad for taxpayers.
	This industry, almost more than any other, needs clarity and stability if it is to have the confidence required to make long-term investment decisions. Those decisions are very long term, and some of them have to be taken quite soon. Indeed, Britain's ability to meet our climate change commitments could be compromised without an early resolution of the conflicts that appear to exist inside the Government. The current crisis—

Michael Weir: For the sake of the clarity that the hon. Gentleman mentions, can he say whether he would have put #610 million into British Energy?

Tim Yeo: If the hon. Gentleman is patient, I shall come to exactly that point. The current crisis is played out against the background of an industry that is undergoing fundamental change. After more than a quarter of a century of largely benign conditions in the energy markets in Britain, we face two very big challenges, the first of which is the move from self-sufficiency—we are one of only two G8 countries to enjoy the status of a net exporter—to heavy dependence on imports. Most of that will be gas, and much of it will come from countries that may be subject to some degree of political risk. Secondly, there is the growing international recognition of climate change as an urgent issue. Our obligations to meet our CO2 emissions reduction targets are already quite challenging, and they may well become much more so if future international negotiations set even more demanding targets. I want Britain to play its full part in responding to the problem of climate change, but I do not want us to get ahead of what other countries are doing. However, I certainly do not want us to lag behind them, either.
	The Liberal Democrat motion reflects their underlying hostility to nuclear power, but despite 29 minutes from the hon. Member for Twickenham (Dr. Cable), I am little the wiser about the actual substance of Liberal Democrat policy. He began by attacking the privatisation of British Energy not, the House will have noticed, on ground of principle, but apparently because the price that was charged at the time was too low. The Liberal Democrat position on privatisation appears to be, XIt's all right—if investors lose enough money."
	The hon. Gentleman ducked a question about whether the Liberal Democrats support nuclear power, but their XFederal Policy Consultation Paper No. 61" is quite clear. Should he hold different views, I am glad to tell him that the consultation period ends on 25 October, so he has just enough time to make his own submission—if he can work out what his views actually are. The document states:
	XCurrent party policy calls for nuclear power to be phased out".
	He also agreed with an intervention from the hon. Member for Bury, North (Mr. Chaytor), who said that nuclear power is intrinsically uneconomic. Despite not contradicting such views, the hon. Member for Twickenham did say that he wanted to commit more taxpayers' money to research on nuclear power. At the end of his speech, however, it was still not clear whether he would put in the #650 million of loans. [Interruption.] He would not—at least that is now clear.
	The Liberal Democrat claim to support renewables gave the Minister the opportunity to entertain the House exceptionally well, I thought. As was suggested, I shall keep the relevant extract from Hansard with me when I visit the target seats that the Conservative party will regain at the next election. It is worth asking whether the Liberal Democrats have any commitment on the ground to the introduction of renewables. Are there any constituencies in which they would support the siting of wind farms?

Richard Ottaway: Twickenham.

Tim Yeo: Indeed. Siting a wind farm in Twickenham is an excellent idea—although not, I hope, on the rugby ground.
	Have the Liberal Democrats calculated the cost of turning down every application for an onshore wind farm, on the achievement of the renewables target to which they are committed? How far would the Liberal Democrats regard it as acceptable to raise the price of electricity to consumers in pursuit of their determination to allow Liberal Democrat Members to oppose planning applications up and down the country?
	The Minister left several questions unanswered. I was not clear about his present view of the new electricity trading arrangements. Does he feel, for example, that the cuts in the prices paid to generators have been adequately passed on to consumers? Does he believe that the problems at TXU—which were touched on by the hon. Member for Ipswich (Mr. Mole) and which, happily for consumers, appear to have been resolved satisfactorily—will have a domino effect elsewhere in the industry?

Brian Wilson: I want to be clear about this point. I do not think that the cuts have been adequately passed on to consumers—I thought that I had made that clear.

Tim Yeo: I thank the Minister for that clarification. The Minister was also unclear in his answer to the question posed by my hon. Friend the Member for Tatton (Mr. Osborne). Indeed, the Government's amendment is ambiguous on the subject of nuclear power generally. At least the Liberal Democrats are clear—if wrong on the issue—that they rule out new nuclear power stations. They appear to rule new stations out even if they would deliver cheaper electricity to consumers and might be the best way for Britain to meet its climate change obligations, however important those obligations become in the future. We still do not know the Government's position on the issue; perhaps that is because they do not yet know it.
	Every day the Government delay making their position clear—and the decision is left in the in-tray—adds to the costs that taxpayers and, eventually, consumers may have to pay. The Minister made some reference to 29 November, when the issue will have to be resolved, but it is not clear what Ministers will know then that they do not know now. Why do we need to wait another five and a half weeks for the Government's position to be unveiled?
	The costs of keeping British Energy afloat mounted rapidly, from #410 million on 9 September to #650 million on 26 September. To put the latter figure in context, it should be compared with the annual budgets of #22 million for the Energy Saving Trust, #26 million for the Carbon Trust and #17 million for the energy efficiency best practice programme. It should also be compared with the #55 million spent on research into renewables.

Simon Thomas: Surely the more frightening figure is the #2.6 billion that went from the non-fossil fuel obligation to the Magnox nuclear site, purportedly to help to pay decommissioning costs. Not a penny appears to have been spent on decommissioning costs. Would the hon. Gentleman have paid the #650 million?

Tim Yeo: I am coming to that point. [Laughter.] Hon. Members must be patient, because we need to develop the argument logically.
	When did the Government realise the extent of British Energy's difficulties? The fact that British Energy was trading at a loss must have been clear to the Minister's advisers well before 9 September. When did British Energy first discuss its anxieties with officials in the Minister's Department? Did not those discussions start months before the crisis package was announced on 9 September? Was not the first advice that his Department sensibly gave to British Energy to go away and discuss with BNFL a renegotiation of the high reprocessing costs that British Energy pays? Can the Minister confirm that those discussions between British Energy and BNFL took place and that an agreement was reached, but that the deal was unfortunately blocked, not by him or his officials but by the Treasury?
	Apart from the reprocessing costs, the other big burden that has been imposed on British Energy is the climate change levy. On this point, I agree with the hon. Member for Twickenham. The climate change levy is not a climate change levy, but simply a clumsy and arbitrary energy tax that has nothing to do with climate change. If it did have anything to do with climate change, it would not be applied to British Energy. It is time the Government stopped insulting the intelligence of the energy industry and calling the levy a climate change levy.
	It is also time to recognise that there are better ways to encourage reductions in carbon dioxide emissions. Those reductions would ensure that the resources were applied where they would be most effective. That could be achieved by means of a carbon tax, and an emissions trading system that was fully compatible with what will be introduced in Europe.
	Does the Minister agree that the cost of supporting British Energy would be much lower if the Government were to allow the company to negotiate freely a new deal with BNFL, and if the Government replaced the climate change levy with a mechanism that directly targeted the carbon dioxide problem?
	In that context, I make it clear that the cost of propping up British Energy in the short term could be much lower if the Government were to adopt the measures that I have set out. However, even at #650 million, that cost is lower than would be the decommissioning cost that would fall on the public sector if British Energy were closed down immediately. That cost could not be met by a company whose financial difficulties are as obvious as British Energy's, and it would dwarf the #650 million that has been put in.
	That in no way, however, reduces my concern about the delay that is taking place. The matter should be resolved urgently, and I have made two practical suggestions about how the burden could be reduced. To be fair to British Energy, if it must bear the decommissioning and waste disposal costs, it is entitled to have its contribution to helping Britain achieve its climate change commitments recognised. Unfortunately, not everyone is willing to give it that recognition.
	The Minister has not yet made clear the Government's solution to the problem. When he winds up, I hope that he will explain to the House what Project Blue is, and whether the Government are examining the possibility of taking British Energy back into public ownership. If he does confirm that, will he explain how that will help reduce the costs that British Energy faces? The problem is that market prices are lower than the costs of production, and that does not have to do with who owns the shares.

Andrew Stunell: Does the hon. Gentleman's last point mean that he believes that it would be right for the Government to take British Energy back into public ownership?

Tim Yeo: No, I do not believe that that would be right. I do not see that it would help the current problems in any way. Whether the company is owned privately or publicly would not alter the fact that the costs of production are higher than the prices that it can receive. There is no advantage to be found in taking the business back into public ownership.
	Will the Minister also clear up doubts that have surfaced recently about the Government's intentions with regard to the creation of the Liabilities Management Authority? Recent press reports have suggested that the Bill to create that authority may not appear in next month's Queen's Speech, and it would be helpful if those doubts could be set aside. If that Bill does not appear, it will raise further questions about the Government's attitude to the industry.
	Looking ahead, the Opposition support the Government's target that 10 per cent. of electricity should be generated from renewable sources by 2010, although we realise that achieving that target now looks a challenging task. We support the mechanism—the renewables obligation—that the Government have chosen to achieve the target, and we are sympathetic to the suggestion in the PIU report that a further, higher target could be set in the longer term, perhaps for 2020. However, Britain will struggle to meet its climate change obligations if the portion of electricity currently generated by nuclear power is generated in future exclusively by fossil fuels. In my view, it would be folly to rule out nuclear power today. A responsible Government would want to keep that option open.
	Future generating capacity will have to meet economic and environmental objectives. The environmental costs and benefits of nuclear power would have to be reflected properly in future electricity markets, and the value placed on the instruments will change as our understanding of the scale of the threat from climate change develops and our appreciation of the true cost of the nuclear legacy is refined.
	We have the opportunity—but it is only brief—to take advantage of a lull in the development of new non-renewable generating capacity to improve our knowledge and to develop policy instruments that will reflect those costs and benefits fairly in a free market. A future Conservative Government would not take a decision to replace nuclear with nuclear; nor would they rule out new nuclear-generated electricity if, with the legacy costs provided for and the associated risk accounted for, it proved to be the most economic way of continuing to meet the global requirement of addressing climate change.

Gregory Barker: Does my hon. Friend think it telling that in the greatest free market in the world, the United States, there is no nuclear generator under construction, nor is there ever likely to be, because of the fundamental economics that are recognised there? To do so would require private finance.

Tim Yeo: I think that the circumstances in the United States market are not always the same as those in ours. However, I am clear that we should allow the market to be the primary determinant of where we generate our electricity from. If there are ways of generating it more cheaply from other sources, we should use them. I believe that we will face more onerous obligations because of the greater recognition of the climate change threat. So the need to be able to generate power from sources that do not make the climate change problem worse is likely to grow. Any future Government will have to bear that factor in mind.

David Chaytor: Will the hon. Gentleman give way?

Tim Yeo: No, I am about to finish, because I want other right hon. and hon. Members to be able to take part.
	There are many other issues on which I hope we can touch on other occasions, including the need to work harder to promote energy efficiency and to avoid unnecessary delays in making grants available for the construction of offshore wind farms.
	In conclusion, I hope that the Government's White Paper will not be subject to further delays. I hope that its explanation of Government energy policy will be clear enough to remove the uncertainties that plague the industry. Some matters, however, need not wait until the White Paper comes out next year. The problems facing British Energy, which have led to taxpayers' money being lent to the company, could be significantly reduced by an announcement this evening or in the very near future of a recognition by the Government that their policies have contributed to the company's difficulties. I regret that the Minister has not yet made such an announcement, and I think that the effect of his failure to do so and the continuing delay in deciding how to resolve the problem will be felt by energy consumers—that is, every man, woman and child in the country. The price of the Government's delay will be paid by the people of Britain, and for that reason the Opposition support neither the motion before the House nor the Government's amendment.

Geoffrey Robinson: Although I welcome the fact that Liberal Democrat Members have taken the opportunity to initiate this debate, Government and Conservative Members alike can only deplore the lack of seriousness with which they have addressed it. We are dealing not with a single crisis in the nuclear industry but with the entire energy policy for the United Kingdom, not just now but for the next 50 years. Energy policy supremely transcends the time scale in terms of which each of us is naturally inclined to think—the time scale that takes us up to the next election. I thought that the hon. Member for Twickenham (Dr. Cable) had a great opportunity, living in the nether world of non-office, to say that the Liberal Democrats would take a stand, make their policy clear and overcome their natural tendency to try to exploit the Government's immediate crisis.
	I wanted to speak in the debate this evening—I am grateful for being chosen, Madam Deputy Speaker—because I suppose that I bear some responsibility for the change from the pool arrangements for pricing energy to the present new electricity trading arrangements or NETA. Under the old pool arrangements, nuclear energy, including French nuclear—we did not even know whether it was French nuclear; it could have been any energy from France—was guaranteed baseload under any circumstances. All the gas that came in was on baseload as well. All such energy was guaranteed, not at the competitive market price, as was often erroneously thought, but at the intervention price—the price at which the marginal producer, coal, quoted for the production that the others on baseload could not meet. The effect was a very high price, which was rightly paid not to the marginal producer during the short period when marginal total production was required but to everyone—to all those guaranteed baseload. The system was not only anti-competitive but clearly anti-coal. On that basis, in the Treasury, it unfortunately—or perhaps in some ways fortunately, as I welcomed the challenge—fell to me to say that that was no argument for closing down coal-fired energy production or for closing down our pits. It was simply a rigged market that worked in one direction.
	I was not there when the new arrangements were entered into. Clearly, since then there has been a switch in the whole bias away from the anti-competitive anti-coal situation to an anti-competitive anti-nuclear situation. The entire drop that was required in the cost of energy has been borne by the generators and not by the retail operators, as yet. Those generators—in particular, nuclear—that have not been able to control their retail outlet and offset the 40 per cent. reduction in the price paid for the generation of electricity have come badly unstuck—none more so than British Energy.
	British Energy has behaved very responsibly—unlike Railtrack, if I may say so. It explained its problems to the Government and said that it wanted to be responsible, but that there was no way that it could meet off its own bat a 40 per cent. reduction in a matter of a year or two in the price paid to it for a production cost that it had until then been guaranteed under the old pool arrangements. It took the problem to the Government, saying that it was at least in part of their making. This Government and I personally must accept that element of responsibility for it, even though we were not responsible for setting up the arrangements that preceded that.
	That is why my hon. Friend the Minister for Industry and Energy has done a very good job tonight in a brilliant response to a good Opposition-day debate that was marred by the vacuity that the Liberal Democrat party brought to it. My hon. Friend has not tried to evade responsibility for the #600 million plus—it may well turn out to be more—that that policy is going to cost us. Nor, as yet, has he pre-empted the options that are open to him to deal with it.
	We can always attribute blame, but rather than looking back we must look forward to find out how we can deal with this problem. I shall devote a few remarks to that subject. First, hon. Members on both sides of the House—even the Liberals with their fantastical imaginations—must accept that the three dominant criteria that must be met in British energy policy are security of supply, diversity and an environmentally acceptable means of delivery. The idea that is implicit—I hate to say this, but at one point one can almost see the drafting hand of the Treasury in it—in the performance and innovation unit report is that those three criteria can be reconciled in a market-oriented policy, but that is just not realistic.
	Energy affects the whole country and is vital to our existence—as we have said, the development of a supply can easily extend over 50 years—and it cannot be left to the vagaries of an oil price that might double or treble from one year to the next, or a gas price that could do the same. What company could possibly price its products against that background? What private sector company is going to invest against the background of those criteria, not knowing from one day or one year to the next whether it may face a 100 per cent. change in its gross and net margins? It is for those reasons that, like it or not, the Government have to be involved in energy policy.
	The Government will always be involved; they can try to avoid the problem and say, XThese are hideous things and we want to leave them to the market". They could try to do what the Tories did, which was to dismember the sector and liberalise it; but at the end of the day, as we have all seen, all those problems come back to the Government. I certainly saw that when I was faced, in 1997–98, with the imminent collapse of the coal industry, just as the present Minister faces the imminent collapse of our private sector nuclear industry. We must face the problems.
	Instead of facing the problems, the Liberal party gave us a trivial contribution, although I hate to say it, from the normally distinguished hon. Member for Twickenham. If we are to face the problems, we have to reconcile those three key criteria. If we are to have diversity, we must accept that gas will become more predominant; it is the cheapest and, to some extent, the cleanest fuel. We need nuclear energy. Where else will the 20 per cent. come from? There must be a continuing role for coal for as long as the supply lasts, for as long as there are reserves and mines are sunk and miners are willing to work them. There must be an increasing role for renewables. I am sure that the whole House will agree about that.

Kevin Hughes: Coal has a future; it has a key role in our energy supply. It can produce fewer emissions with the use of the new-generation clean-coal technology that could come on stream with some support and help from the Government. My hon. Friend rightly points out that we need to maintain diversity. Any sensible Government must do that.

Geoffrey Robinson: I entirely agree with my hon. Friend, and I am grateful for his intervention. Coal is seen as old technology that has to be subsidised; nuclear technology is new, yet subsidy is implicit in its use. What price do we want to pay?
	What of security? If the House decided that the free market should reign and that we should again let loose the dash for gas that we halted in 1998, we would be 90 per cent. dependent on gas within 20 years. I do not believe that we can obtain much more than 10 per cent. from renewables. However, even if we get 15 per cent. of our energy from renewables by 2020, we will still be 85 per cent. dependent on gas. Where will it come from? What security will there be? I mean no disrespect to the gas-producing countries, but there are thousands of miles of pipeline. Countries that do not have—

Gregory Barker: rose—

Geoffrey Robinson: I am aware of the hon. Gentleman's views and although we are under time restriction—[Hon. Members: XNo".] Very good. I shall give way in a moment—

Alan Whitehead: Will my hon. Friend give way?

Geoffrey Robinson: I shall give way to my hon. Friend, too.
	The argument was made at the Treasury in the past: how can we let this country become 90 per cent. dependent on gas that travels thousands of miles from countries that are subject to political turbulence, to put it no more strongly than that? That scenario is not acceptable. Rather than letting the free market—although it would not be entirely free even in that context—hold sway, this country would do much better to plan. I hate to use the word Xplan" because I know that it is anathema to both sides. However, we need an arrangement or a scheme to provide a balanced source and diversity of energy supply.

Gregory Barker: The hon. Gentleman looks to the future by as much as 20 years, yet the solutions to our energy problems have been distinctly 20th century. He has made no mention of fuel-cell technology or combined heat and power. Surely, we should be investing in new technologies such as those, and breaking the grip of large-scale generators, rather than trying to project 20th-century solutions on to 21st century challenges.

Geoffrey Robinson: On the contrary, I think that I have something of a reputation for being a pioneer in new technologies—new industry. I believe, though, that one cannot be totally dependent on their coming off. That is one thing on which we cannot depend. One can plan on the basis of one's coal reserves, knowing what they are and being reasonably sure of extraction and production rates. We do not know so much about the new technologies, in which, as I am sure my hon. Friend the Member for Eccles (Ian Stewart) would agree, we must invest more. We must move towards fusion and so on. What we cannot do is count on technologies being available in future and close down what is available to us now.

Alan Whitehead: Does my hon. Friend accept that one cannot rely on market mechanisms alone to ensure the future of energy supply—that, almost uniquely, requiring renewables to come to market by predominantly market mechanisms is not a logical part of a future energy policy?

Geoffrey Robinson: I agree with my hon. Friend entirely. I believe that it is a desirable part of a future energy policy, and I would support those new technologies, as all Labour Members do. The Liberals support them in theory, but—as always with the Liberal party—not in practice. We have to put in place every mechanism that is available to us to help the new technologies succeed in due course. But what I cannot do, and what I am sure, in light of his intervention, my hon. Friend would not do, is to base the security and diversity of our supply on their realisation.

Bill Tynan: Will my hon. Friend give way?

David Chaytor: Will my hon. Friend give way?

Kelvin Hopkins: Will my hon. Friend give way?

Geoffrey Robinson: I give way to my hon. Friend the Member for Hamilton, South (Mr. Tynan).

Bill Tynan: On the question of new technology, does my hon. Friend accept that as regards nuclear waste, there is an urgent need to ensure that we invest in technology that can deal with our present problem; and that if we do, we should not necessarily agree that that would open the door for nuclear energy to be used as a fuel in the future?

Geoffrey Robinson: I agree with my hon. Friend, and I think I accept what the chief scientific adviser to the Department of Trade and Industry said: broadly speaking, in the absence of any immediately credible alternative to nuclear fuel, we have to see that nuclear fuel, at 20 per cent. approximately, is replaced by nuclear fuel. That is the position that we come to. We must have a big national debate on that, focused on the House and decided on in the House. I noticed that the Tory party was agnostic in its approach, although I suspect that its Members agreed with me that the option has to be decided one way or the other, because if it is left open for ever while the reactors close down, it is clear to everyone that one no longer has an option.

David Chaytor: rose—

Kelvin Hopkins: rose—

Geoffrey Robinson: I give way once more, but I do not think that I should give way again after that.

Kelvin Hopkins: I listened with interest to my hon. Friend's speech and agree with much of what he is saying, but I was disappointed by his slighting reference to planning. Some 22 years ago I was co-author of a document called XA Planned Energy Policy" for a fine trade union called NALGO. I think my hon. Friend would agree that had we followed a planned energy policy for the last 22 years, we would not be in the mess that we are now in.

Geoffrey Robinson: I am grateful to my hon. Friend. I was not suggesting that I had changed my spots over the past few years. I still believe that in certain areas, planning is a very sensible thing to do. We have not always got it entirely right in the past, but I am sure of one thing—that in energy, a sensible Government overview of the whole situation and a sensible principle that will guide the decisions that we take, are essential.
	I shall now discuss the immediate crisis, which is the occasion of our debate. The transfer of the liabilities—the legacy—must be carried through in the next Queen's Speech. The agency must be set up. These are things that we all, as Governments and consumers, have accumulated and inherited. The agency must be set up, to enable us to move to a new situation in which there is a solvent British Energy. That too will require a very sensible, commercial approach to dealing with what will be left of British Energy, together with BNFL.
	I put this concept to the Minister. There is a possibility, admitted throughout the House—even by the Liberals, who say that we should continue research into it—of an ongoing role for nuclear energy. It is well known that BNFL owns Westinghouse, has the licence to generate electricity from pressurised water reactors and has created 200 power stations throughout the world. The Minister and the Government should therefore consider bringing together BNFL and British Energy in a new public-private enterprise, in whichever way one wants to structure it and in whichever of today's acceptable terms one wants to define it, so that they can be shorn of the inherited liabilities and free to make their case to join in a role—the House must decide if there is one—for nuclear energy in the future.

Michael Jack: The hon. Member for Coventry, North-West (Mr. Robinson) made some important points about the way in which the electricity generation market and the pricing thereof has developed over time, but I want to spend a few moments saying a few words on behalf of the 1,500 nuclear energy workers at BNFL Salwick in my constituency. With the exception of the fuel for the pressurised water reactor at Sizewell, they make all the nuclear fuel in this country. If some of them had been in the Public Gallery tonight, they would have scratched their heads in disbelief, particularly at the terms of the Liberal Democrat motion, given that it simply expresses concern, without giving an opinion, about the very proper action that was taken to safeguard British Energy's short-term future.
	The Liberal Democrat motion also refers to the so-called competitive market proving that nuclear-generated electricity is uneconomic and also generates long-term environmental costs. Neither in the motion, nor with great clarity in the remarks made by the hon. Member for Twickenham (Dr. Cable), was any serious comment made about energy security, carbon dioxide emissions or a proper, sustainable balanced energy policy—all of which are vital to the United Kingdom.
	Although the Minister was excellent in his scathing denunciation of Liberal Democrats' equivocation and double-dealing in their policy statements, the Government motion is equally unclear on the industry's future, which affects so many of my constituents. It says that it:
	XRecognizes that the future of nuclear power in the UK is a question that has to be addressed on its own merits, not in the light of a particular set of circumstances surrounding a particular private sector company".
	At the heart of our nuclear policy lies a publicly owned company—BNFL. It is very much the key to some of the issues involving the disposal of the waste of the nuclear electricity generating business, but there is not much mention of that in the Government motion.
	One company's difficulties do not necessarily make a policy, but the Minister touched on the new electricity trading arrangements. That illustrated the important failure in the Liberal Democrat motion to acknowledge that Governments have effectively determined the market for electricity and its price in the United Kingdom since the end of the second world war.
	To return to the remarks made by the hon. Member for Coventry, North-West, if the previous market had some failings, one must acknowledge that there may be something wrong with NETA. If a company such as British Energy, which turns over #1.9 billion a year, is effectively on the brink of not making any profit and having to be shored up by a Government loan, given the disparity between the receipts from the sale of the electricity and its wholesale price, there is, as they say, something wrong in the state of Denmark, which ought to be investigated without delay.
	Those of my constituents who are involved in the manufacture of nuclear fuel have observed that the current market arrangements lack any serious long-term underpinning. The base load characteristics of nuclear electricity generation are not properly recognised in the present market arrangements.
	To put it very simply, we have to decide whether this country wants to enjoy what it has been happy to enjoy until now—a balanced electricity portfolio including coal and nuclear energy, which is under our direct control, and gas, which is questionable because it comes from more volatile and less secure sources of supply, as was mentioned by the hon. Member for Coventry, North-West.
	If we want to keep those issues in balance, we had better quickly reach decisions about the future disposal and legacy of nuclear waste, about the right pricing model to ensure that the base load characteristics of nuclear energy are properly recognised and about the need for some long-term assurances to enable planning to take place, for example, with the improved technology of the AP1000-type generator, which would certainly be more economic and efficient in the future.
	The nuclear fuel workers in my constituency have striven to improve their operation and to reduce their production costs. They have an excellent safety record. As a company, they have taken full cognisance of their environmental responsibilities, yet their prospects seem deeply uncertain.
	Everyone who speaks in the debate will wish to acknowledge the important role of renewables. However, with the kilowatt hour charge for landfill gas of between 2.5p and 3p per kilowatt hour, for wind of between 4p and 5p and for renewable crops of between 6p to 8p, we are considering important economic developments, but at a cost. With energy, we cannot have our cake and eat it.

David Chaytor: rose—

Simon Thomas: rose—

Michael Jack: I will not give way now because I want to speak for 30 more seconds and then resume my place to allow others to make their points.
	If we want to have a sustainable supply of electricity with proper investments in the right sorts of energy that recognise environmental obligations—there is the long-term question of the disposal of waste for all industries, with the exception, perhaps, of wind and wave—we cannot have electricity that is so cheap that it does not generate long-term investment funds. The nuclear fuel workers in my constituency will look to the Minister for answers—if not tonight, in his White Paper—that will secure their future and the security of the nation's energy supplies.

Stephen Ladyman: My hon. Friend the Minister said that in perhaps five years' time we shall have seen what renewables can contribute. I may have misunderstood what he was saying because we can work out now what renewables can contribute. I am a great supporter of renewables, as is everyone who has contributed to the debate. However, it is important that we are realistic about what we can and cannot achieve through them.
	The 10 per cent. target that the Government have already set is a stretch target. There are already serious doubts about whether we can reach it. The 20 per cent. target that is proposed in the PIU report by 2020 is almost impossible. Any discussion with engineers or anyone else who is involved with trying to implement renewable resources will lead to them telling my hon. Friend the Minister that it is impossible.
	I shall run through one or two of the reasons why it is impossible. For example, let us consider the number of windmills that we would need to match the output from the type of power station that the right hon. Member for Fylde (Mr. Jack) mentioned—that is, a 1,000 MW nuclear power station. We would require 6,000 windmills with 20 m blades. To reach 20 per cent. production of our electricity capacity using wind by 2020, we would have to start building 40 windmills per month, every month, from now until 2020. That will not happen in Liberal Democrat constituencies, will it? It is impossible to have such targets.
	I was grateful for some comments that were made by Professor Ian Fells at a meeting that was held at Portcullis House last night. He gave a vivid example. He said that if we put the whole of Kent—the entire landmass—into coppiced willow and converted that into biomass energy production, we would have only half the energy production of Dungeness B on the coast. Those are the simple facts. We can make these calculations; we do not need to wait five years to find the answers to such calculations.
	The hon. Member for Twickenham (Dr. Cable), who spoke for the Liberal Democrats, talked about the problems of NETA. He said that under the current arrangement a market is being created in which nuclear power is not economic. If we take that argument to its logical conclusion—if we say that we will have only that which is economic in the short term with no intervention in the marketplace—we have to start building gas-powered stations and nothing but. There will be no renewables because by any estimate of costs, renewables are three times as expensive as nuclear power—not even taking into account the additional capacity needed for the times when renewables are not available.
	Professor Laughton of the university of London sent a letter during the recess—to all of us, I assumed, although having listened to the comments of those who overestimate wind input I realise that either some hon. Members did not read the letter or it did not reach them. He points out that the times that wind capacity in this country can generate power do not coincide with the times of peak demand; therefore if we build 20 per cent. wind capacity, we have to build matching conventional capacity that can be switched on to supplement provision when wind power is not available.

Simon Thomas: Will the hon. Gentleman give way?

Stephen Ladyman: I cannot, because other hon. Members want to speak and I have only a few minutes in which to make my key points.
	My hon. Friend the Minister and his team have to address the following issue when they are preparing the White Paper. The reason why intervention in the marketplace is necessary is that if we rely solely on a market mechanism, we will not achieve the balanced energy supply that we need. We will be forced into consuming increasing amounts of gas and into becoming net importers of energy—in fact, we became net importers about two weeks ago. Ultimately, we will be forced to buy our energy from Scandinavia and then the countries of the former Soviet Union. That is no way to build a stable energy supply for this country. We must not only keep the nuclear option open, but force it forward.
	Everyone seems to forget the health consequences of energy policy. We talk about global warming, but ignore air pollution. The United Nations estimates that 3 million people die each year as a consequence of air pollution caused by burning fossil fuels. The Minister for the Environment estimates that each year 24,000 people in this country die prematurely as a result of the burning of fossil fuels. Every year, the 25 per cent. of our energy production that is currently produced by nuclear generation saves 4,000 lives in this country. If our efforts to build a broad energy portfolio result only in our replacing the 25 per cent. nuclear production with 25 per cent. renewables, we will have made no contribution either to cutting greenhouse gas production or to reducing the huge number of people who die prematurely as a result of inhaling pollutants.
	I ask my hon. Friend the Minister to think carefully when he is drawing up the White Paper. Not only must he keep the nuclear door open, but he must kick it down and make sure that we start actively to pursue a nuclear policy. That is right for our energy policy and right for the environment.

Richard Ottaway: I declare my interest as a consultant to AEP Energy Services, as set out in the register.
	Two dogs have not barked tonight: first, the European Union, and secondly, the role BNFL is playing in market interaction. For the first time, we in this country have a pure market in energy, and the consequences are profound. Since 1998, there has been a 40 per cent. fall in wholesale electricity prices but, tragically, the consumer has not benefited. Ann Robinson, chair of Energywatch, the independent gas and electricity consumer watchdog, said:
	XThis long-awaited NETA end of year review fails to answer the questions we have raised about the massive difference between the savings being enjoyed by electricity suppliers as a result of NETA and those being passed on to domestic consumers. The report has done little to alleviate our fears that consumers are being ripped off."
	That is the state of play: despite the fall in wholesale electricity prices, the consumer is receiving only about an 8 per cent. reduction.
	One of the problems that we face is that, in my judgment, in the vertically integrated players—the generators and the suppliers—there may well be cross-subsidy going on, which is not feeding through to the consumer. I suggest to the Minister that he invite Ofgem to take a much harder look at what the suppliers are doing, particularly the vertically integrated suppliers, and what can be done to generate much more competition between the suppliers so that that can work its way through to the public.
	The first dog that is not barking is BNFL. In focusing on British Energy tonight, we are looking at the wrong company. It happens to be the weakest of the companies in the private sector, so it is the first one that hits the stops when the going gets rough in the market. BNFL, owned by the Government, is far more uneconomic. If one draws up a list of the 10 most uneconomic power plants in this country, the five Magnox plants still in operation are Nos. 1, 2, 3, 4 and 5 on that list. That is what is causing the distortions in the market. Under normal circumstances, one would expect those stations to be phased out, but for reasons that we have discussed and for the reason that we have not hit the stops until now, they are being kept open.
	Any restructuring of British Energy must take account of the whole market, so the Minister should not be looking just at British Energy—he should be looking at BNFL. If he were to phase out the uneconomic power stations in a sensible way, he would see the price of electricity rising, which would bring the cash back into the market and into the generators, so that alternative forms of energy could be considered, and nuclear and clean coal could become viable options again. However, he must get the price up and get more liquidity and more investment into the market.
	The second dog that is not barking tonight is the European Union. I have no doubt that giving state aid to just one company in the market is discriminatory and is distorting the market. I am sure that in the long term that would be in breach of the EU state aid regulations. I appreciate that, in the short term, the Minister is doing the right thing in sorting out the problems, but if there were a long-term package that favoured British Energy against the rest of the market, in my judgment he would fall foul of the EU regulations.
	That is not the Minister's fault; he is in a difficult position. He has the White Paper coming up, as well as the shake-out of the market and the problems in the nuclear sector. As other hon. Members have said, the difficulties with gas arise from the fact that from 2006 we will start importing and we do not want excessive reliance on gas. As regards coal, the rules for sulphur and nitrogen emissions will start biting, and unless the Minister can get clean coal technology into place, the coal-fired power stations will run into difficulties, but the market is too low at present, so he cannot get the investment into clean coal technology. As others have commented in respect of renewable energy, the Government will be hard pushed to hit their target of 10 per cent. by 2010. I wish them well in their efforts. The Minister is doing an admirable job in pushing the renewable project as hard as he can, but there are limitations.
	Any restructuring must take into account the whole market. My advice to the Minister is to take out the uneconomic plants, let the prices come back up and get the liquidity back into the market.

Mark Tami: Thank you, Mr. Speaker, for giving me the opportunity to speak in the debate this evening. It is a pity that we do not have more time to spend on an issue of such great importance for the country.
	The energy review published in February this year was a useful document identifying some of the key challenges facing Britain in the coming years. Identifying the problems is one thing; doing something about them is quite another. We have had reviews, reports and studies in the past, but we have never translated those into a meaningful and structured energy policy for Britain. In the pre-privatisation days, we relied predominantly on large coal-fired stations supported by a strategic nuclear component. I seem to recall that the three new coal-fired power stations that were due to be built by the Central Electricity Generating Board were cancelled directly after privatisation. We have not seen, and nor are we likely to see, the building of another coal-fired power station.
	Likewise, nuclear generation enjoyed a turbulent ride through the privatisation process. First, it was to be included in National Power, but the City got cold feet and it was removed. The Magnox power stations were also removed and the rest of the nuclear power industry went to what has subsequently become British Energy. As in the case of coal, the end result is that we have not seen the building of another nuclear station and we are not likely to do so in the foreseeable future. The approach to renewables has perhaps been more consistent. The CEGB and the Scottish generators did not see them as a worthwhile and viable investment, and it is fair to say that the privatised companies have followed suit.
	We saw under privatisation an incredible and ultimately unsustainable dash for gas that led to the early closure of many coal-fired power stations that could and should have produced energy for many years to come. That had the terrible effects on the UK coal industry that we have all seen. For the longer term, the dash for gas has had even more damaging effects. A country that rightly prided itself on being self-sufficient in energy production now faces dependency on imported gas in the not-too-distant future. We will be a net importer of gas by 2005. The energy review is not worried about the increased use of imported gas in terms of energy security, but I am not too sure about that. While supply might not be a major problem, we cannot guarantee price, and that must endanger security. The recent changes in gas prices have already had an effect on existing gas-fired stations and on the likelihood of further stations being built.
	Where are we now? On the positive side, as many hon. Members have made clear, we have the cheapest electricity for 10 years. We have also made some progress on carbon emissions, although that is a by-product of the increased use of gas rather than part of any concerted plan of action. However, I do not think that we have addressed the major issues that we face today in terms of meeting our energy needs in the years to come and into the middle of the next century, while maintaining our presumably growing commitments on climate change.
	The industry is currently geared almost purely by commercial decisions. While that remains the case, I cannot see how we will make a meaningful change in how we produce energy in this country. The energy review rightly calls for an increase of some 20 per cent. by 2020 in the contribution made by renewables. That is a very tall order and I think that it will be unobtainable if we are not prepared to grasp the challenge of greater intervention in the mix of fuel generation. The review rejects that possibility on the ground that it distorts the market, but surely that is the point. It goes on to say that the
	Xrole of government should be to monitor the actions of the market participants and only intervene at the last resort."
	If we are not prepared to intervene or exert influence, we will recognise what we have done only when it is too late. We will then have to intervene, as we will be at the last resort. If we leave things entirely to the whims of the market, the reality is that nothing will change, or if changes occur, they will be driven purely by price, rather than by any need for diversity or by environmental concerns.
	Nuclear power currently accounts for 15 to 20 per cent. of our electricity generation, but that percentage will fall. By 2020, the majority of our nuclear power stations will have closed. We must either be prepared to accept that or to change it. We must face up to the current situation. While nuclear power is not and never has been the cheapest means of energy production, it makes a major contribution to reducing carbon emissions. We must consider nuclear power in a full light and not purely in price terms.

Robert Key: The debate has been a wasted opportunity. A pathetic, 19th-century motion was followed by a limp, 20th-century argument from the Liberal Democrats. We should have discussed the future of energy—science and engineering. We want to be involved in nuclear fusion and on the way to the hydrogen revolution. We will get there through science and engineering. We must abandon the country's perception that it is anti-science. It is preposterous to debate energy in an anti-science culture that looks backwards, distrusts science and will not understand the reality.
	The proposition that renewable energy is not favoured and is not on an even playing field with other forms of energy is ridiculous. The renewable energy programmes are important and we welcome them, but they would not have a prayer if they did not have free ride on the back of the formerly nationalised electricity systems. We must inject some science, technology, sense and engineering into our debates.
	Some of us are convinced that we must have a new generation of nuclear stations, constructed with new technology. I do not mean the old-fashioned, defence-based technology, which, as we all acknowledge, had terrible problems in the past. We want to move beyond that, and I hope that the Government will have the courage to do that.
	Will the Minister state that he genuinely wants to support the work in plasma physics at Culham, and to look forward beyond Jet to the ITER programme, which must be the greatest hope for the planet?

Andrew Stunell: The debate has been lively and interactive. There are many points about which I wish to speak, but it is simply not possible to do so.
	After six and a half years, we do not have a Government energy policy, and the payment of #650 million to one company constitutes another contradictory bombshell. Other companies are in the queue, holding out their begging bowls.
	The Minister produced some good, knockabout stuff, which I enjoyed. I suggest that he speak to my hon. Friend the Member for Southport (Dr. Pugh), who is desperate for an offshore wind project near his constituency; he has been denied one by the Ministry of Defence.
	British Energy is 20 per cent. above the market price. If Conservative Members believe that a 20 per cent. price premium should be paid to keep the company afloat, good luck to them.
	On security, more than 20 per cent. capacity above maximum peak demand is available. On diversity, my hon. Friend the Member for Twickenham (Dr. Cable) referred to the necessary portfolio of technologies. On safety, I point out that a series of nuclear plants have been successfully closed down in good order in the past 10 years. There is no problem about closing down the remainder.
	It is important to keep the environmental impact of our energy policy in focus. My hon. Friend the Member for Twickenham made our position clear. If anyone wants more detail, I say for the third time in the Chamber, XPlease buy my book." It deals with the matter in depth.
	The #650 million has been wasted. The Energy Saving Trust made it clear that if the money was invested in achieving the 20 per cent. improvement in energy efficiency in the domestic market, we could save the amount of energy that such plants produce.
	The Energy Saving Trust has a budget of #28 million rather than #650 million. Much more could and should be done. I tell those people who claim to be in favour of both nuclear and renewable energy that there is a competition for resources in this country. The Government must decide whether to pump the limited money into a failed nuclear giant, renewables or energy efficiency and conservation. It is competition for resources that this argument is blowing to smithereens; this is not about pro and anti-nuclear arguments. The Government have so far failed to explain how high a price they are prepared to pay to keep British Energy alive. How will they be able to justify refusing bids from other firms and other technologies if they have rescued British Energy?
	We had 20 minutes of knockabout from the Minister, followed by 10 minutes of evasion and three minutes of departmental brief, but we are still no clearer about where the Government stand on these matters. What is the Government's long-term energy policy?

Malcolm Bruce: Next week.

Andrew Stunell: Next week, next year, next decade—who knows?
	Our motion poses serious questions not just about British Energy but about Britain's energy in the future, and I urge the House to support it tonight.

Brian Wilson: I am delighted to hear that the Liberal Democrat spokesman enjoyed my opening remarks, so I shall give him just one more. We have had an excellent, if all-too-short, debate and contributions from both sides have served the important purpose of feeding serious views on serious subjects into the White Paper process. I would welcome more debates and more dialogue, because they would allow people who really know what they are talking about to contribute to the White Paper.
	We have heard a great deal about renewables targets. This matter was summed up for me by a press release issued in Scotland. The Scottish Environment Minister, Ross Finnie, announced that the Scottish Executive were setting a new 40 per cent. target for renewables. Splendid! I have to say that I am slightly allergic to targets. If a target has been set for 20 years hence, for example, that can often be a substitute for the need to do anything for the next 10 years. Anyway, within milliseconds of that statement being made by Mr. Finnie—who, for the benefit of our external audience, is a Liberal Democrat—a press release was issued by the Scottish Liberal Democrat environment spokesperson, a Ms Nora Radcliffe MSP, under the inspiring—inspirational, indeed—headline
	XSNP scunnered over green energy challenge".
	[Interruption.] I am sorry. Is that word taught in public schools? Do we all know what Xscunnered" means?
	Ms Radcliffe went on to say that the main point in support of this 40 per cent. target was that
	XThe SNP have clearly been scunnered with this announcement as their own target stands at only 30 % of green energy supplies by 2020."
	The comparison with wee boys—or, indeed, wee girls—in a playground making contrasts between their respective anatomies springs to mind here.
	I do not want to labour the point, but setting targets achieves nothing. Delivery achieves something, and I hope that the Liberal Democrats will take my remarks to heart, because, instead of being regarded as the party of sustainable energy, as it would wish, it is in some danger of being regarded as the party of unsustainable hypocrisy.
	The substance of this debate has been excellent. I fully respect the reasons why the Opposition spokesman has had to leave the House, but I want to answer some of the points that he raised on the nuclear issue. First, Project Blue is nothing sinister. That is not a name that I would have chosen myself, but the use of code words when discussing commercially sensitive information is perfectly normal, and there was no agenda there. The name describes a process of monitoring what was going on in British Energy.
	That leads me to the answer to another of the hon. Gentleman's questions. Of course we knew that there were problems with British Energy, and we were monitoring them very closely. It is true that we did not know the full extent of British Energy's problems until the company approached us in early September. When the discussions between two commercial entities—BNFL and British Energy—concluded without delivering the solution that had been widely hoped for, the extent of the difficulties became apparent and the company approached the Government. There is absolute transparency about what we discussed and when we discussed it. I shall be happy to answer further questions if they are asked.

Andrew Lansley: I want to avoid confusion. Liberal Democrats assert that British Energy is producing electricity at 20 per cent. above the market price. If past liabilities are not taken into account, is not the marginal cost of production for British Energy's nuclear fleet about 1.8p per kilowatt hour—only slightly above the prevailing market price?

Brian Wilson: The hon. Gentleman makes his own point, which is a perfectly reasonable one.
	What is undoubtedly true is that even given the slight swing that has occurred because of the market difficulties with electricity, the wholesale price has risen to a point at which British Energy is presumably operating profitably. I agree with much of what has been said on both sides: decisions that are fundamental to security of supply, and the economic interests of the country cannot be left entirely to the vagaries of a marketplace that can produce such a swing. [Hon. Members: XYour marketplace."] That sounds like an allegation, but my hon. Friend the Member for Coventry, North-West (Mr. Robinson) has been entirely open. He gave a frank and analytical explanation of why the changes were made. They were made for good reasons, and they have produced many benefits. What we must recognise, however, is that they have not been an unqualified good; they have had other effects, which we must now examine in the spirit of wanting not only a competitive market but of wanting to be sure that the objective of that market—driving down the price of electricity—is not achieved at the cost of security of supply or our environmental obligations. That strikes me as a straightforward proposition, but a complex one to deliver in practice, especially in a liberalised market.

Malcolm Bruce: This is a serious point, which is at the heart of the debate. If the market is not the whole answer and there is a strategy, should not the Government make clear which kind of energy they wish to encourage, how they will react to changes in the market, and what their long-term policy is? Without that clarity, we do not know what they are doing. Are they just manipulating the market according to their whim? That is what they have been accused of doing. The Minister really must make their position clear.

Brian Wilson: We are manipulating the market in one sense, through the support we are giving to renewables. Are the Liberal Democrats criticising us for manipulating the market in favour of renewables?
	I believe that the #650 million loan to British Energy—I emphasise that it is a loan, and that it is capped—makes sense for the energy industry. Let me say in passing that it also makes sense for the people who work for British Energy. I believe it makes sense for security of supply, but I believe too that it makes sense for the taxpayer. The daftest option, from the taxpayer's point of view, would be to switch off electricity generation by British Energy, surrender the revenue, and at the same time pick up all the costs that would be associated with such action. That, it appears to me, is the sequence of actions that the Liberal Democrats and their associates are recommending, and it is bonkers.

Paul Marsden: Is it not shameful that a Labour Minister should defend the nuclear energy industry when he knows as well as I do that it should not be propped up by the Government? We should be giving far more support to the renewable energy industry. The Minister should be ashamed.

Brian Wilson: The hon. Gentleman's comments reflect the fact that he arrived in the Chamber two minutes ago. Tell them that in Shrewsbury.
	Let me say something about NETA—

Robert Smith: rose in his place and claimed to move, That the Question be now put.
	Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—
	The House divided: Ayes 54, Noes 313.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Order [17 October] and Standing Order No. 31 (Questions on amendments):—
	The House divided: Ayes 293, Noes 52.

Question accordingly agreed to.
	Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House welcomes the publication earlier this year of the Performance and Innovation Unit's review of the strategic issues surrounding energy policy for Great Britain up to 2050; welcomes the Government's commitment to publish an Energy White Paper in the New Year setting out a long-term framework for energy policy following its recent extensive and innovative public consultation on energy issues; understands that British Energy's problems, and those of certain other players, are about companies rather than a way of generating electricity and welcomes the speed with which the market can respond to protect the interests of consumers; recognizes that the future of nuclear power in the UK is a question that has to be addressed on its own merits, not in the light of a particular set of circumstances surrounding a particular private sector company; further recognizes that it is not the responsibility of Government to bail out electricity suppliers unless it threatens safety or security of electricity supplies; and welcomes the work Government has done to promote sustainable energy use in terms of energy use reductions and to promote the development of renewable energy. DELEGATED LEGISLATION
	Ordered,
	That the Countryside (Provisional and Conclusive Maps) (England) Regulations 2002 (S.I., 2002, No. 1710), dated 7th July 2002, be referred to a Standing Committee on Delegated Legislation.—[Mr. Caplin.]

STANDING COMMITTEE ON THE CONVENTION

Motion made,
	That the Order [12th June] relating to the Standing Committee on the Convention be amended, in paragraph (4)(b), by leaving out the words 'or be counted in the quorum'.—[Mr. Caplin.]

Hon. Members: Object.

BUSINESS OF THE HOUSE

Ordered,
	That, at the sitting on Wednesday 23rd October, opposition business may be proceeded with, notwithstanding paragraph (2)(c)(i) of Standing Order No. 14 (Arrangement of public business), for three hours or until Seven o'clock, whichever is later, and proceedings shall then lapse if not previously concluded.—[Mr. Caplin.]

PETITIONS
	 — 
	Food Supplements Directive

Andrew Selous: I rise to present a petition about choice in health food products, signed by about 340 of my constituents, which reads:
	To the House of Commons
	The Petition of Consumers for Health Choice and its supporters,
	Declares that Consumers in the United Kingdom have for many years maintained good health by choosing to take safe vitamin and mineral supplements and herbal remedies; and fears that the European Food Supplements Directive and the Proposed European Directive on Traditional Herbal Medicinal Products would severely restrict the number and range of such products on general retail sale in the future.
	The Petitioners therefore request that the House of Commons requires that the Secretary of State for Health does all in his power to protect the rights of the UK consumers by ensuring that such European legislation does not unnecessarily and unacceptably restrict the availability of natural health products.
	And the Petitioners remain, etc.
	To lie upon the Table.

Stephen Ladyman: I rise to present a petition in similar terms to the hon. Member for South-West Bedfordshire (Andrew Selous).
	The petition reads:
	The Petition of Consumers for Health Choice and its supporters, declares that consumers in the United Kingdom have for many years maintained good health by choosing to take safe vitamin and mineral supplements and herbal remedies; and fears that the European Food Supplements Directive and the proposed European Directive on Traditional Herbal Medicinal Products would severely restrict the number and range of such products on general retail sale in the future.
	The Petitioners therefore request that the House of Commons requires that the Secretary of State for Health does all in his power to protect the rights of UK consumers by ensuring that such European legislation does not unnecessarily and unacceptably restrict the availability of natural health products.
	And the Petitioners remain, etc.
	That petition was signed by more than 120 people at Herbs, Gardens and Health, a health food store in St. Peter's, near Broadstairs.
	To lie upon the Table.

Air Weapons

Parmjit Dhanda: I am delighted to be able to present a petition calling for greater regulation of air weapons, which was signed by 272 people from my constituency of Gloucester. The petition
	Declares that greater regulation of our weapons will save lives and improve animal welfare.
	The Petitioners therefore request that the House of Commons urge the Secretary of State for the Home Department to bring forward legislative proposals to raise the minimum age for unsupervised use of air weapons from 14 to 17 years, and to bring the regulation of air weapons into line with existing firearms legislation.
	And the Petitioners remain, etc.
	To lie upon the Table.

HEPATITIS C

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Caplin.]

Richard Spring: May I thank you personally, Mr. Speaker, for giving me the opportunity of introducing this debate, and the Minister for being here to reply.
	I would like to bring the Minister's attention to something about which there has already been correspondence with the Department of Health, namely the case of my constituent, Dominique Porché, who suffers from hepatitis C and for whom all avenues of compensation appear to have closed, most unjustly.
	Before discussing the circumstances surrounding my constituent's case, I would like to talk about the condition of hepatitis C itself.
	The Campaign for Effective and Rational Treatment estimates that there are between 300,000 and 500,000 hepatitis C, or HCV, cases in this country. By way of tribute to the Haemophilia Society, I should add that about 2,800 haemophiliacs also have HCV and the society has produced a well thought-out compensation package for consideration.
	I shall outline what we are dealing with medically. Hepatitis C is a disease characterised by inflammation of the liver, usually producing swelling and, in many cases, permanent damage to liver tissue. It is a contagious, viral disease that can lead to serious permanent liver damage. The identification of the specific hepatitis C virus in 1989 solved a mystery: over the previous 10 years, large numbers of hepatitis victims began to appear, but when examined those patients tested negative for both hepatitis A and B. In 1990, when a test was developed to identify individuals infected with a hepatitis variant, hepatitis C was found to be responsible for the majority of cases.
	In contrast with most other types of hepatitis, the majority of HCV infections lead to liver disease. Hepatitis C, in combination with hepatitis B, accounts for 75 per cent. of all cases of liver disease throughout the world. As HCV infection is typically mild in its early stages, it is rarely diagnosed and is often not recognised until it has progressed.
	The virus mutates frequently. Once an infection has begun, hepatitis C creates different genetic variations of itself within the body. The mutated forms are frequently different enough from their ancestors that the immune system cannot recognise them. Thus, even if the immune system begins to succeed against one variation, the mutant strains can take over and become new predominant strains. As a result, the antibodies developed against hepatitis C do not produce an immunity against the disease, as would be the case with most other viruses.
	I turn to the case of my constituent Dominique Porché who, despite his infection, has dealt with his illness in an enormously robust and positive way. I have come to admire his resilience, patience and good humour in adversity.
	In 1998, he contracted hepatitis C from blood transfusions given during operations at Addenbrooke's hospital in Cambridge. In September 1991, routine testing for blood transfusions was brought in. It is unclear exactly when the National Blood Authority may have become aware of the likelihood of my constituent's infection. In any event, he was not informed of that possibility for a further five years.
	In 1996, he was informed by the National Blood Authority, via his GP, Dr. Bateman, that he had been identified as infected. That flowed from the Department of Health's national hepatitis C look-back exercise. My constituent said:
	XI was in such shock, confused and very worried. I did not know what to do about this horrifying news."
	In a letter from the consultant in transfusion medicine based at the East Anglian blood centre in Cambridge, my constituent was offered assistance to try to understand the implications of his infection. Disgracefully, there was not even an allusion to compensation.
	In April 2001, more than 12 years since my constituent underwent surgery, he happened to be watching a television programme and became aware of possible compensation claims. At no stage had he been informed either by Addenbrooke's hospital, the National Blood Authority or any other arm of the national health service of his right to pursue such a claim.
	I shall also mention the case of another constituent—Mrs. Angela Woodley of Haverhill. Although her case is different in some respects from that of Dominique Porché, there are similarities in that she contracted the disease at Addenbrooke's hospital from blood transfusions in the 1980s. Mrs. Woodley was receiving treatment for cancer at the time. Her situation represents another tragic story and she is still fighting for compensation. She recently observed to me:
	XIt seems nobody wants to know. You never know when it will hit and nobody ever talks about it. The horrific truth is that there are hundreds of people that contracted this disease the same way as I did. How many have to die before this Government takes notice?"
	The Minister will of course be aware of section 32(4)(a) of the Consumer Protection Act 1987, which overrides normal provisions concerning the deliberate concealment of facts. That means that even if it were proved that the National Blood Authority knew about the likelihood of infection sometime around 1991, there would be no way of extracting such evidence.
	Indeed, in a letter to me dated 25 January, the then Under-Secretary of State, the hon. Member for Pontefract and Castleford (Yvette Cooper), detailed the legal underpinnings of the so-called 10-year rule:
	XIt should have been made clear that the ten-year ruling means that any legal proceeding needs to have been initiated with a solicitor within ten years of the injury or infection. The Consumer Protection Act 1987 is based on the European directive 85/374/EEC on the liability for defective products. This states in Article 11 that 'Member States shall provide in their legislation that the rights conferred upon the injured person pursuant to this Directive shall be extinguished upon the expiry of a period of 10 years from the date on which the producer put into circulation the actual product which caused the damage, unless the injured person has in the meantime instituted proceedings against the producer'."
	In the circumstances surrounding the case of Dominique Porché, the cry has to be, XWhere is natural justice?" There was a clear dereliction of duty on the part of different NHS personnel not to tell him his rights. When he brought the matter to my attention, I obviously got into correspondence with both Addenbrooke's hospital and the then Suffolk health authority. In a letter to me dated 8 February 2002, the Administrative Director of Addenbrooke's hospital wrote with almost heroic understatement:
	XWithout making any commitment on behalf of the Trust, I do have to agree that it seems that this chap has received a rather poor deal and I will have a further look into the way in which his case has been handled here to see if there is anything at all that we can do to help."
	It has been pointed out to me that the Consumer Protection Act 1987 is draconian in respect of limitations of actions. Schedule 1 of the Act introduced section 11A into the Limitation Act 1980. It provides for a 10-year long stop on actions for breach of statutory duty. At the end of 10 years the right of action is extinguished. There is no discretion to disapply the 10-year long-stop rule and no provision for extension in respect of late knowledge of a potential action.
	Similarly, in a letter sent to Dominique Porché written at my instigation, the Chief Executive of the Norfolk, Suffolk and Cambridgeshire health authority, Peter Houghton, wrote:
	XI refer to your letter of 4th February to Jane Rutherford at Suffolk Health Authority...I have discussed the issues you have raised with Jane Rutherford. Jane has taken, on your behalf, advice from the NHS Litigation Authority, which has been dealing with the Hepatitis C Litigation. Whilst both the NHSLA and the Health Authority wish to extend their deepest sympathy to you in view of the situation in which you find yourself, neither body is authorised to offer patients compensation by way of an ex-gratia payment, or where they have failed the litigation process."
	So we have reached a dead end, but it is scandalous that that should be the case. Of course there has to be a time limit on litigation, and of course litigation cannot be open-ended in the pursuit of a compensation claim; but how on earth can an individual know of his rights when no one in authority tells him?
	Dominique Porché is a self-employed painter and decorator. He has a young son and his wife is expecting another baby. Obviously, he worries about their future in the event of his condition deteriorating. I personally feel deeply committed to supporting him and to trying to secure him some compensation for the tragedy that has cast such a blanket of anxiety over his life.
	Let me tell the Minister that I shall not allow this issue to be pushed under the carpet after this debate. Compensation arrangements have been made in many other countries—Ireland, Spain, Hungary, Sweden, Canada, Italy and Norway, among others. The Minister will note the absence of the United Kingdom from that list.
	British citizens are entitled to clean blood, as Mr. Justice Burton ruled in the case of S and others v. the National Blood Transfusion Service and others last year. However, in practice, that right is not recognised in this country, as it does not extend to individuals, such as Dominique Porché, who are also seeking compensation.
	In my view, the moral argument is transparently obvious and powerful. I hope that the Minister will accept that Dominique Porché has been treated shabbily and unsympathetically because of inflexibility of the system. That really is not fair; it is simply not good enough.

Hazel Blears: I thank the hon. Member for West Suffolk (Mr. Spring) for raising this very important issue. Like him, I should like to say a little about hepatitis C before coming to the individual circumstances of his constituent.
	Hepatitis C is recognised as a global public health problem. The World Health Organisation estimates that there are about 170 million people with chronic hepatitis C infection worldwide. The prevalence of hepatitis C infection varies in different countries. Studies suggest that we in England have a relatively low prevalence of hepatitis C compared with many other countries. The best estimate is that probably about 200,000 people in this country, or 0.4 per cent. of the general population, are likely to have been infected and to have become chronic carriers of hepatitis C.
	Although that is a low prevalence of hepatitis C, it is nearly ten times the estimated figure for those infected with HIV, which shows that it is quite a significant problem for us. However, unlike HIV, we have a drug treatment that can clear the hepatitis C virus in many of those infected, but we obviously recognise that there is no room for complacency. The drug treatment does not work for everyone, but there is a little more hope for those with hepatitis C than for those infected with HIV.
	In most cases, hepatitis C is spread by contact with the blood of someone who is infected. The main groups at risk of infection are injecting drug users and those who received blood transfusions or blood products before screening and viral inactivation processes were introduced.
	People with chronic hepatitis C infection may remain virtually symptomless for many years, and a large number of people will live out their life in the normal way. However, some people may suffer more general debilitating effects, which can affect their quality of life. In a proportion of cases, the liver may become progressively inflamed and damaged. If not treated, that may eventually develop over a number of years into cirrhosis, or occasionally liver cancer. So the disease has some very serious consequences indeed for those people who are not susceptible to the latest drug treatments and for whom the disease progresses to its end stages.
	Two groups of people contracted hepatitis C through blood—the issue that the hon. Gentleman raises. The first group includes about 3,000 haemophilia patients treated with clotting factors before 1985. That is an important date, because it was only in that year that it became possible to remove viruses from pooled blood products by using heat treatment. However, the hon. Gentleman's constituent falls into the second group of people: blood transfusion recipients who contracted the virus before September 1991, the month in which the United Kingdom first introduced blood testing for hepatitis C.
	About 700 such people, including the hon. Gentleman's constituent, Mr. Porché, were identified through a look-back study conducted by the National Blood Service from 1995, but it is likely that it has been impossible to trace many hundreds of others, even through that look-back study, who may be in a similar position.
	The reason why people were still being infected with hepatitis C as a result of blood transfusions as late as 1991 requires some explanation. Unlike pooled blood products that can be heat treated, the red cells for transfusions cannot be treated to remove viruses. The only way to remove viruses from transfused blood is to screen out the infected donors. So there is no treatment of the blood itself that can be carried out. The hepatitis C virus was firmly identified only in 1989. The first screening test for hepatitis C for donors was marketed later that year. It was very experimental at that stage. The United States was one of the first countries to introduce hepatitis C testing in May 1990. The UK began screening blood for hepatitis C in September 1991, using a far more reliable second-generation test. These dates are crucial when considering people's entitlement to compensation. A key issue is whether the national health service was in possession of the scientific knowledge to enable it to carry out the processes at the time.
	I move on to compensation. Haemophiliacs infected with hepatitis C have been campaigning for compensation for a number of years. They have put forward a proposal for a scheme that amounts to about #500 million over 10 years. That was submitted early this year by the Haemophilia Society. We are currently giving the proposal our detailed consideration. There has also been a call for financial assistance in Scotland for all people infected with hepatitis C through blood. That has been discussed by the Scottish Parliament Health and Community Care Committee. The Scottish Executive is currently considering its response to that.
	The Government have listened carefully to all the arguments in favour of a compensation scheme. I am aware of the personal tragedy that is caused to those who find themselves in these circumstances. However, the fact remains that in the NHS compensation is usually given only when either the NHS or those working in it have been at fault. That is where there has been some negligence and the damage can be attributed to it. That is not the case with hepatitis C infection. We therefore do not believe that an exception can be made to the general rule in the case of people infected with hepatitis C. The same conclusion was reached by the previous Government. They examined the issue in the mid-1990s and decided that it was not possible to depart from the general principle.
	As the hon. Gentleman has said, a number of blood transfusion recipients with hepatitis C were successful in winning damages in the High Court through a judgment in March 2001. It was a landmark judgment made under the Consumer Protection Act 1987. Those who were awarded damages were infected between March 1988, the date when the Act came into force, and the start of screening for hepatitis C in September 1991. The hon. Gentleman will appreciate that that is quite a small window of the people who were infected between the date that the legislation, which is strict product liability legislation, came into force and the date when it could reasonably be held that the NHS should have, and did, introduce screening of blood donors. Those people who fell into that category were entitled to compensation.
	The Consumer Protection Act implements the 1985 European directive on product liability. As I have said, it is a piece of strict liability legislation. That means that there is no requirement of proof of fault, unlike the ordinary law of negligence. It is about defective products. The judge ruled that hepatitis C-infected blood was a defective product and that, irrespective of fault, there was product liability. That is why it appears that the claimants who fell within the window to which I have referred were treated differently in that they received compensation. There is a good legal reason why they became eligible for compensation.
	The outcome of the case does not alter our position on the general rules of compensation. Damages were awarded on a no-fault basis, and at present we do not have such a basis of compensation. Although Governments have occasionally made ex-gracia payments to patients—for example, in the case of haemophiliacs with HIV and the families of people with variant CJD—these have been in truly exceptional circumstances that do not apply to hepatitis C. When HIV first emerged as a disease, it was almost undoubtedly the case that people would die quickly in dreadful circumstances as a result. Even to date there is no accepted treatment as there is in the case of some of those suffering from hepatitis C.
	My understanding is that the hon. Gentleman's constituent was infected after the Consumer Protection Act came into force, but he was not part of the group action and is now barred from seeking damages under the limitation period in the Act. It contains a provision stating that legal proceedings must be initiated with a solicitor within 10 years of the infection. I entirely understand the frustration felt by anyone who has missed out on an opportunity to take legal action for damages. The hon. Gentleman's constituent is not the only person in that position of whom we are aware, but it would set a most unfortunate precedent in other litigation where there are Xtime bars" if the Government were to accept that as a reason for awarding financial compensation, because it would be entirely outwith the legal framework that applies to our decision making in such matters. I recognise how hard that seems to individuals facing difficulties or family tragedies, but it is important that we maintain the integrity of the system and the rules by which we are bound.
	The hon. Gentleman made two points to which I want to respond. The first is that his constituent, Mr. Porché, was not informed of his infection until 1996, five years after the start of screening. That requires an explanation. Secondly, Mr. Porché says that once he had been told of his infection, NHS personnel were derelict in their duty by not informing him of the opportunity to take legal action and become part of the litigation that was brought.
	As I mentioned earlier, the NHS began a look-back exercise in 1995 to trace, counsel and, if necessary, treat people who had been infected with hepatitis C through blood transfusions. That was announced in the House by Mr. Tom Sackville, who was the Minister responsible at the time, on 11 January 1995, and guidance was issued to the NHS in April that year. I have managed to obtain a copy of the press release issued in 1995 by Mr. Sackville. In it, Dr. Jeremy Metters, the chairman of the advisory committee and the Government's deputy chief medical officer at the time, explained the reason for the delay:
	XUntil recently there was no treatment to offer those who might be identified and it was believed that this exercise would have been technically very difficult. However, following a pilot research study procedures have been established which make it possible to trace those at risk and, more importantly, certain drugs have recently been licensed which may be suitable for the treatment of some of those involved. This look-back programme will go ahead without delay."
	That is the explanation for the time that elapsed between the infections and the look-back exercise: no treatment was available and there were technical barriers to the exercise. However, once they had the means, they got on with the action.
	As for whether Mr. Porché should have been told about the opportunity to claim damages, I am not sure of exactly when he was in contact with NHS officials; however, it may be that at that time the litigation had not started, or it was in its infancy, or people were not certain of the validity of the claim. The Act on which it was based was relatively new, and the judgment was not issued until 2001. If the hon. Gentleman gives me full details of Mr. Porché's contacts with NHS personnel, I shall certainly look into the matter, but it may well be that the litigation had only just started to be contemplated and was therefore not a significant feature in the mind of the NHS at that stage.
	The hon. Gentleman described how his constituent is, naturally, worried about his future and that of his family, and what would happen if his condition were to worsen and perhaps prove resistant to the drug treatments available. Many people with hepatitis C have had difficulties in obtaining insurance. It is, sadly, inevitable that policies and premiums offered by insurers will reflect health factors, but I understand that the Association of British Insurers has told us that applicants who are infected with hepatitis C should not automatically face increased premiums or refusal of cover.
	Many people with hepatitis C will live out their normal life span and not progress to serious liver disease, but some may do so. There will therefore be a range of outcomes for insurance applications from people with hepatitis C, depending on the individual case. Those will range from standard rates to a small weighting, through to a greater weighting or, in serious cases, refusal of cover.
	I know that Scottish Ministers have been working with the Association of British Insurers and the Council of Mortgage Lenders on the issue. I am happy to consider a joint meeting with my Scottish colleagues to see whether we can take matters forward and give people some reassurance about their access to finance in the future.
	I shall finish by mentioning some of the steps that the Government are taking to ensure that we get effective prevention, testing and treatment services for people who have hepatitis C. Treatment has improved markedly in recent years. The National Institute for Clinical Excellence assessed the drug combination therapy of ribavirin and interferon for treating hepatitis C and published its recommendations in October 2000. The therapy has been shown to be twice as effective as any previous treatment and clears the virus in about 40 per cent. of those treated. We have provided additional funds to make sure that the NICE-approved therapies can go through.
	There are grounds for further optimism. I understand that there is a new treatment, a modified slow-release form of interferon called pegylated interferon, which became available last year. That appears to be even more effective than conventional interferon, and when used in combination with ribavirin, it clears the virus in about 55 per cent. of cases. That is good news for people who have been infected.
	We have recently been developing a national strategy on hepatitis C, and considering ways of raising public awareness, raising the awareness of clinicians, trying to prevent new cases of hepatitis C, making sure that there is early diagnosis and access to the new therapies, developing managed clinical networks to get everybody in the field involved and, crucially, improving the evidence base so that we can reduce new cases and treat people effectively. Much work is going on in connection with hepatitis C.
	The chief medical officer's infectious diseases strategy, XGetting Ahead of the Curve", recommended that we have the hepatitis C strategy. That will be followed up by an action plan setting out the action that we can take to make a difference. I assure the hon. Gentleman that the NHS takes the matter extremely seriously. I understand the frustration and the difficulties faced by his constituent, among others, but unfortunately, in the circumstances it is not possible for the Government to go outwith the normal system of clinical negligence in this case. We will do everything we can to make sure that people get the proper treatment, and that the proper support is available to the thousands of people and their families for whom hepatitis C is an extremely important issue in their lives.
	Question put and agreed to.
	Adjourned accordingly at three minutes to Eleven o'clock.